Why deepening EU-ASEAN ties in aviation is a win-win situation

Aviation is a strong driver of growth, jobs, trade and mobility for the world's economy. The European Union (EU) was one of the first markets to be fully deregulated in the 1990s and owes this to its success. As a result, European aviation today represents 26 percent of the world market, contributes €110 billion (P5.890 trillion) annually to Europe's Gross Domestic Product, and directly employs 2 million Europeans. As for consumers, they now benefit from lower fares, more choice and better connections. This is why I am following with great interest the process within the Association of Southeast Asian Nations (ASEAN), to create a single aviation area, and I am convinced that it would lead to a boom similar to what the EU experienced.

The rapid economic growth of Asia is already pulling the world economy's center of gravity, and the air transport industry that serves it, to the East. The Asia-Pacific region will account for around 40 percent of the world air traffic in 20 years and demand for air transport between the EU and the ASEAN region is booming. The air traffic between the two regions has grown by more than 75 percent over the past 10 years. These figures clearly illustrate the need for the EU and ASEAN, to strengthen our aviation relations as our two markets represent a combined population of 1.1 billion.

The Asia-Pacific region will account for around 40 percent of the world air traffic in 20 years.

That is why in December 2015, the European Commission adopted a new aviation strategy where we propose to negotiate the first ever bloc-to-bloc aviation agreement between the European Union and ASEAN. Such agreement would be an important building block in our ambition to bring the EU-ASEAN overall relationship to a higher level. This new partnership would improve mutual market access, provide investment opportunities and foster regulatory cooperation. In particular, it will create commercial opportunities for enhancing direct flights between Europe and ASEAN destinations, such as Singapore. Demand for air travel between the EU and ASEAN may be growing, but nearly all of it is currently channeled through indirect routes– notably through the Gulf, with neither European nor ASEAN carriers benefiting from it.

I therefore hope to be in a position to soon start negotiations, which is why I will travel to Singapore to directly discuss the matter with ASEAN Transport ministers who are gathered there for the Aviation Leadership Summit.

This approach has proved to be a win-win situation in the past. With the US and Canada the number of passengers increased by 3 million, with Morocco the number of direct routes increased by 87 percent, and with the Western Balkans the number of scheduled airlines increased by 59 percent. As we know more traffic means more jobs and more wealth. Evidence also shows that better connectivity leads to more trade and is a major determinant in the location choices of large firms’ headquarters.

As we know more traffic means more jobs and more wealth.

While air traffic growth offers tremendous economic opportunities, it poses an increasing challenge to the environment.According to the International Civil Aviation Organisation (ICAO), emissions from aviation are forecast to grow by at least 63 percent by 2020 compared to 2006. According to the United Nations Office for Disaster Risk Reduction (UNISDR), over the past 20 years the Philippines was fourth in the world among countries hit by the highest number of natural disasters, the majority of which were weather and climate related. At the COP21 in Paris, both the EU and the Philippines, through its chairmanship of the Vulnerable Forum, played an instrumental role to broker an historic deal, which gave the world a lifeline and I hope that we will now be able to build on this momentum. This year we will be working closely with ICAO on two ambitious global measures, the first is an unprecedented standard to cap Co2 emissions, which will push industry to be as fuel-efficient as possible. The second is a global mandatory system to offset aviation emissions, to stabilize emissions from 2020 in a cost-effective manner.

I am convinced that deepening the cooperation between the EU and ASEAN will be beneficial to our respective industries and citizens, and will also send a clear message: that the competitiveness of the aviation sector can be reconciled with its sustainability.

Violeta Bulc is the European Commissioner for Transport.