SINGAPORE - A landmark aviation pact that could lead to more flights between Singapore and major European cities, as well as create more competition between airlines, was signed on Monday after years of on-again, off-again negotiations between Asean and the European Union (EU).
The two regional blocs put pen to paper on the Asean-EU Comprehensive Air Transport Agreement at the 28th Asean Transport Ministers’ Meeting held in Bali, Indonesia, in a move that promises to open up the skies and provide opportunities for more passenger and cargo flights between the 10 Asean member states and the 27 EU members.
More than one billion people stand to benefit from greater air connectivity between the two regions as it will boost business, trade and tourism, officials previously said.
Asean said on Monday in a joint statement: “Passengers can look forward to a greater variety of destinations, more flight frequencies, and more travel options between South-east Asia and Europe.”
Under the pact, airlines from the 37 Asean and EU countries will be able to fly any number of services between the two regions.
They will also be able to fly up to 14 weekly passenger services and any number of cargo services from a country in one bloc to a country in the other bloc with fifth freedom traffic rights, via any third country or beyond to any third country.
Fifth freedom rights allow foreign carriers, after flying in from abroad, to offload passengers and freight and then pick up passengers or cargo before flying on to another country.
The pact will also allow for closer cooperation between Asean and the EU in areas such as aviation safety, air traffic management, consumer protection, and environmental and social issues.
Singapore’s Transport Minister and Minister-in-charge of Trade Relations S. Iswaran said the agreement opens up new growth opportunities for the aviation industry as the sector recovers from the Covid-19 pandemic.
“Singapore is honoured to have been Asean’s lead coordinator from the inception to the conclusion of the agreement,” he said.
“It is a forward-looking and ambitious statement of our commitment to a safe, sustainable and resilient aviation future,” he added.
Indonesian Transport Minister Budi Karya Sumadi, who chaired the transport ministers’ meeting, said the signing of the agreement will accelerate economic recovery and reinvigorate the global economy.
Asean secretary-general Lim Jock Hoi said the signing sets a significant milestone in world aviation history and also marks 45 years of partnership between Asean and the EU.
Meanwhile, European Commissioner for Transport Adina Valean said the Asean-EU agreement replaces more than 140 bilateral air services agreements, providing a single set of rules and reducing red tape.
Monday’s signing comes as international air travel continues to make a comeback from the debilitating effects of Covid-19, with demand for travel skyrocketing as border restrictions have eased.
Singapore Airlines’ (SIA) European flights, for instance, had a 92.1 per cent load factor in August, up from 23.2 per cent the year before. Load factor is a measure of the percentage of seats filled.
The flag carrier said in July that it will add more flights from the Republic to Paris in response to strong demand. From Dec 1, the French capital will be served by 12 SIA flights a week, up from seven flights a week now.
As at May, Changi Airport had re-established links with more than 90 per cent of its European destinations pre-Covid-19. The average passenger load factor was more than 70 per cent at the time, close to pre-pandemic levels.
The Asean-EU aviation pact was mooted in February 2014 at an aviation summit in Singapore.
Negotiations between the two regional blocs started in 2016, with Singapore leading the talks for Asean and the European Commission leading negotiations for the EU.
It took eight rounds before negotiations concluded in June 2021. The agreement was then vetted by lawyers and translated ahead of Monday’s signing.
It will now undergo ratification in accordance with the respective procedures of the Asean member states, the EU, and its members.
Professor Alan Tan of the National University of Singapore Law School, whose specialisations include aviation law, previously told The Straits Times that the agreement would allow unlimited non-stop flights for Singapore carriers to places such as Paris that may currently have restrictions on such flights.
There could also be more transatlantic flights by Singapore carriers to the Americas via cities such as Paris, Berlin, Rome, Madrid and Lisbon.
Travellers should expect more competitive fares given the increased choice, but Prof Tan also warned that the Asean-EU agreement is no silver bullet and its initial impact is likely to be modest, given the limited number of connecting flights to a third country that can be operated on new routes, acute capacity constraints at some European airports, and the formidable competition posed by Middle Eastern carriers.
Mr Mayur Patel, head of Asia at global travel data provider OAG Aviation, said the landmark agreement will most likely benefit other Asean nations more, as Singapore’s air hub is already well developed.
“It opens up opportunities for those hubs to look at new flights without having to be restricted by bilateral agreements,” he said.
This may put pressure on Singapore because of increased competition from regional hubs such as Kuala Lumpur and Bangkok, but Mr Patel said the Asean-EU pact should not be seen as a threat to the Republic, but an opportunity to grow further.
Another beneficiary from the agreement could be long-haul low-cost flights between Asean and the EU, Mr Patel added, citing budget carrier Scoot’s non-stop flights to Berlin as an example.
However, whether airlines will take advantage of the liberalisation of air services depends on a myriad of factors, including supply and demand and route profitability, he said.
On Monday, the transport ministers of the 10 Asean member states also signed an agreement to raise the level of coordination between countries during search and rescue operations in the region.
The ministers also discussed regional cooperation in air, land and sea transport, and met their counterparts from China, Japan and South Korea at the two-day meeting in Bali.