The economic progress of Malaysia and a growing
number of high net-worth individuals in the country is leading to
a steady growth in the demand for business aviation.
This, coupled with the regional dynamics
of the industry, wherein existing hubs such as Singapore's Selatar
airport and Hong Kong International Airport are giving preference
to commercial flights, presents an ideal moment for Malaysia to
According to a recent survey conducted by Frost
& Sullivan among industry stakeholders in the Asia Pacific region,
the Sultan Abdul Aziz Shah airport at Subang in Malaysia is the
most favoured choice for the next business aviation hub in the
"Subang is already the most frequently used
business aviation airport in Malaysia and it has potential to
develop even further," said Nishant Dey Purkayastha, Consultant at
Frost & Sullivan.
Frost & Sullivan estimates that the business
aviation fleet owned and used by Malaysians, which stood at 51
jets in 2017, can potentially reach to 124 jets by 2030.
"However, the industry has several roadblocks
that need to be mitigated in order to realize the full potential.
Regulatory issues related to registration, financing and cabotage
policy are major roadblocks. For instance, only 30% of the fleet
based out of Malaysia are registered in the Malaysian registry.
The others are registered in other countries. This hampers the
domestic charter industry as the internationally registered jets
cannot be used for domestic operations. Other hurdles are in the
form of infrastructure related issues and operational issues,"
The availability of a complete ecosystem,
including charter operators, authorised maintenance centers,
fixed-based operators and parking space, were key reasons that
helped Singapore and Hong Kong to emerge as hubs for business
"Subang currently does have a decent ecosystem,
with some leading global names such as ExecuJet and Hawker
Pacific, as well as established local players like Smooth Route,
Sapura Aero and Redland Aviation. However, some aspects of the
value chain such as painting and modifications, flight simulation
and training, and parts distribution and logistics are missing.
Malaysia will need to attract investments to fill up the gaps and
complete the ecosystem," he added.
Currently, Subang's annual business jet movement
stands at around 3,200. The leading business aviation airports in
Asia Pacific region are Beijing (9,000 movements), Hong Kong (7,250
movements), Shanghai (5,000 movements) and Singapore (4,900
movements). Subang's numbers are marginally ahead of Bangkok's Don
Mueang airport and Manila's Ninoy Aquino airport.
As per Frost &
Sullivan's analysis, if the issues in the ecosystem in Malaysia
can be addressed, the annual business jets movement in Subang can
potentially reach a figure of 9,299 by 2030.
Business aviation sector's contribution to the
Gross Domestic Product (GDP) of Malaysia stands at 0.008%
currently. On the other hand, developed countries such as the
United States, Canada and United Kingdom typically have a
contribution of around 0.20% of the GDP from the business aviation
This provides immense potential for the industry
to grow in Malaysia and at the same time create jobs and
contribute to the economy. Currently, the industry contributes
approximately 96 million Ringgit to the annual GDP and provides
636 person-years of employment. In the best case scenario, this
can potentially grow to 342 million Ringgit in GDP contribution
and 1,546 person-years of employment by 2030.
The development of the industry will require all
the key stakeholders to work in tandem. While the Ministry of
Transportation, the Civil Aviation Authority of Malaysia (CAAM)
and Malaysian Aviation Commission (MAVCOM) will have to take the
lead to ease the regulatory hurdles, Malaysia Airports Holdings
Berhad will have to work in conjunction with agencies such as
Malaysia Investment Development Authority (MIDA) to prospect and
attract the right investors. Understanding the needs of the
investors and coming with an appropriate investment package to
seal the deals.
"Thailand, Philippines and
Indonesia are some of the other regional players that can
potentially look to develop a business aviation hub. But
Malaysia's existing ecosystem is more developed and the industry
players seem to hold a more favourable view of Malaysia. However,
delays in taking steps in the right direction might enable to
competitors to catch up," Nishant added.
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