Economic impacts of the ASEAN single aviation market: focus on Cambodia, Laos, Myanmar, The Philippines and Vietnam

ABSTRACT

Since 2004, the Association of SouthEast Asian Nations (ASEAN) has decided to move towards liberalization of air transport inside the region as well as outside by signing multilateral agreements with other countries. In this article, we focus on the economic impact of liberalization. We show that by liberalizing up to the 5th freedom right, given the expectations with respect to tourism development, national GDP is expected to increase yearly from 1% (Cambodia) to 6.1% (The Philippines). Regarding partner states involved in multilateral agreements, the case of China shows that ASEAN airlines might well face possible competition distortions as a result.

KEYWORDS:

• Air transport
• ASEAN
• competition distortion
• economic impact estimation
• liberalization
• market regulation

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The results of the estimation are available in the endnotes.

2. We argue that Tourism has no direct impact on GDP but affect it through air passengers’ number. However, we analyse the effect on GDP thanks the observation and forecasts on tourist numbers.

3. The evolution of seats supplied being a proxy for measuring traffic evolution in terms of passengers transported.

Additional information

Notes on contributors

Isabelle Laplace

Isabelle Laplace (PhD) is currently the head of the Air Transport Sustainable Growth Research Programme at ENAC. Her expertise concerns the economic aspects of the air transport market in terms of passenger demand, airline behaviour, airport strategies, airport capacity, air transport liberalization, energetic transition, innovation strategies, door-to-door travel and intermodality features between air other transport modes.

Nathalie Lenoir

Nathalie Lenoir (PhD) is professor of economics and coordinator of economics courses at ENAC. Her research interest include congestion pricing, airport slots, competition and intermodality in the air transport, market regulations, airport strategies and multimodal travel demand.

Chantal Roucolle

Chantal Roucolle (PhD) is professor of economics at ENAC. She specializes in applied econometrics. She is involved in empirical research to air transport economics. Her main focus is on airlines behaviour in imperfect markets: pricing, supply of capacities, network expansion, innovation.