And if your neighbour orders aircraft, so you order aircraft,” said Bertrand Grabowski who heads German bank DVB’s aviation and land transport finance divisions. “When you run an airline, for reasons which are both economic reasons and prestige, you want a new kit, so you order an aircraft.

Asia-Pacific planes on order make up 36 percent of the world total and the figure is rising, says Airbus.Īlready last year, available capacity grew faster than passenger demand in countries such as Malaysia, the Philippines and Singapore, putting pressure on yields or the average revenue per passenger for every kilometre flown.īut bankers warn the race to buy efficient aircraft in anticipation of high demand could spell trouble for the sector. “This is the only region in the world where airlines have more orders than current fleet and there’s more to come,” said Brendan Sobie, chief analyst at industry consultancy CAPA.Īirlines in Southeast Asia are estimated to have a fleet of 1,800 by the end of this year, he said, while their order book is set to surpass the 2,000 mark. Southeast Asian carriers have been devouring as many new airplanes as planemakers can sell, gambling that low fares and rising disposable incomes will drive the region’s 600 million-strong population to keep flying to new destinations.Īn aircraft buying binge fuelled by cheap interest rates and backed by Western export credits shows few signs of halting, with Vietnam's VietJetAir and Thailand's Nok Air NOK.BK both expected to place orders at the Singapore Airshow this week.īut after years of explosive growth, the region’s budget carriers are now facing fears of overcapacity as deliveries accelerate, airlines expand into each other’s markets and currency weakness threatens to puncture economic growth. People walk past a Singapore Airshow poster at the exhibition venue in Singapore February 7, 2014.

Starry eyes book summary