ANDREW DOYLE / SINGAPORE
Despite the slump, Asia's aerospace industry has more reason than most to be quietly confident about its prospects in the coming year
Singapore's 11th Asian Aerospace show (AA2002) will open its doors on 26 February amid a mood of cautious optimism that the industry - traumatised has it has been by the calamitous events of 11 September - is firmly establishing itself on the path to recovery.
It is perhaps appropriate that the event, managed by Reed Exhibitions, a business unit of Flight International parent company Reed Elsevier, takes place in a region where long-term growth prospects still remain fundamentally solid despite the setbacks stemming from the attacks on New York and Washington DC.
Around 22,000 trade visitors attended the last show two years ago - slightly down compared with the 1998 event - and Asian Aerospace managing director Jimmy Lau says the indications are that a similar number will attend this time despite moves by many companies to slash their marketing budgets.
"We are working towards the projected turnout," says Lau. "We have a visitor pre-registration programme for this show, and the response has been good."
According to Lau, some exhibitors have been forced to cut costs, but most have decided to maintain their presence at the show, which is widely regarded as the industry's third most important event after Farnborough and Paris. "The slowdown has prompted some exhibitors to be more creative and cautious in their planning and expenditure. These companies are making every effort to maintain their presence at the show. Some have scaled back on their auxiliary activities and services in order to retain full participation," he says.
Despite the air of gloom, Asia offers some hope for quick recovery. China, having recently joined the World Trade Organisation, remains a beacon for the civil sector, while several other countries in the region are beginning to see their air transport industries undergo significant expansion as their economies develop.
However, many of the region's airlines still face major difficulties as a result of the dramatic fall-off in passenger traffic and inbound cargo which originates in the USA. European markets have also seen a decline, albeit less severe - but intra-Asian traffic is holding up relatively well as many travellers opt to make regional rather than intercontinental trips.
Chinese carriers and Vietnam Airlines are among the few operators buying additional aircraft, but most are saddled with excess capacity, and few if any major order announcements are expected at AA2002.
But Airbus will be keen to talk up prospects for its A380 ultra-high-capacity airliner, due to enter service in 2006, for which Asia is a crucial market. It is also preparing to fly the first example of the ultra-long-range A340-500, which will make non-stop flights between Asian and US cities possible for the first time.
Boeing will be placing heavy emphasis on the transpacific market as it continues to refine its high-speed Sonic Cruiser design and markets its own ultra-long-haul offering, the 777-200LR.
On the supplier side, AA2002 will inevitably serve as a showcase for the security-related products which have flooded onto the market after the US attacks. These range from cockpit-door strengthening kits to cabin surveillance cameras and baggage screening devices.
Asia also represents a potentially huge untapped market for regional jets with limited penetration by the likes of Bombardier, Embraer and Fairchild having been achieved so far only in China and Japan. China, however, wants to build its own aircraft, and China Aviation Industry I is leading work on the ARJ21 family which would seat between 70 and 90 passengers.
India and Indonesia are seen by many observers as among the best prospects, but the manufacturers have much work to do to establish the concept of the regional jet in Asia, given the generally high population densities of its cities and airport infrastructure constraints.
Defence
One sector of the Asian market that has, if anything, been boosted by last year's events is defence, resulting in an expected strong showing by military manufacturers at AA2002. Singapore itself plans to launch a tender for next-generation fighter aircraft later this year, and is due to select a helicopter to equip its warships. Neighbouring Malaysia is also looking for fighters and helicopters, and the Philippines has earmarked funding for much-needed modernisation of its air force.
Singapore Technologies Aerospace is expected to showcase the Lockheed Martin F-16 avionics upgrade it is working on in with BAE Systems.
South Korea could be only weeks away from a long-awaited decision on the winner of its $3 billion F-X fighter competition. This is pitching the Boeing F-15 Eagle against the Dassault Rafale and Eurofighter Typhoon, neither of which has secured an export customer.
The need to clamp down on terrorist activities by stepping up border controls is also fuelling increasing interest among South-East Asian nations in maritime surveillance platforms and unmanned air vehicles. These products will be a major focus at AA2002.
Asia's aerospace manufacturers were hit hard by the financial crisis that affected the region in 1997, but many are pushing ahead with indigenous development programmes. The Japan Defence Agency has selected Kawasaki Heavy Industries to lead development of new maritime patrol and cargo aircraft, while South Korea intends to design a multi-purpose helicopter and eventually a home-grown replacement for its locally manufactured F-16 fighters.
These programmes illustrate Asian nations' changing needs, and the necessity for Western firms to form sophisticated long-term partnerships with local industries - the latter in some cases taking the role of prime contractor in aircraft projects.
Indonesian Aerospace, formerly IPTN, is meanwhile attempting to re-invent itself as a major subcontractor with design and development capabilities after the financial crisis forced it to shelve development of the N250 turboprop. The company is likely to reveal more about its plans at AA2002.
Sales opportunities aside, the show will provide a chance for the industry to gather and take stock of the current crisis, and begin formulating strategies for conducting business in a new era.
Visit the Asian Aerospace web site to view the list of exhibitors
Source: Flight International
