Market Newsletter : Now Landing in Asia's Airways: A Traffic Jam : Air carriers are adding flights, buying planes and staking out sky space to keep up with the transportation boom.

By CHARLES P. WALLACE

June 19, 1990 12 AM PT

TIMES STAFF WRITER

BANGKOK —

Air travel is booming in Asia, fueled by a burgeoning regional economy and an explosion of tourism. Airlines are flying at capacity, causing profits on Asian routes to soar. But the result has been a crush that has left the area’s airports backed up with the kind of delays common in U.S. airports.

Bangkok is a good example of the rapid expansion of the Asian market. With nearly 5 million visitors now stopping in Thailand each year, getting to Bangkok can be a hassle. Northwest now has a daily flight to Bangkok, United is expanding to 13 flights a week and Delta has started a daily jumbo service via Seoul and Taipei. Nonetheless, “we anticipate a really full season,” says Northwest’s Bangkok manager, James P. Reihnoldt. “There’s been a phenomenal surge in traffic.” . . . Competition among the airlines is so hot that the Thais are threatening to allow their air traffic rights agreement with the United States to lapse Sept. 30 because U.S. carriers are getting more access to Thailand than the United States gives the national carrier Thai International. Currently, U.S. carriers can fly unlimited flights into Bangkok and beyond, but Thai International gets only five flights a week on the lucrative Tokyo-Seattle route. . . . Strangely, the Thais are not using their unlimited access to Los Angeles, which is considered the most profitable air route over the Pacific. Meanwhile, Hong Kong’s Cathay Pacific recently inaugurated direct flights to Los Angeles. . . .

As a result of the boom, airlines are expanding as fast as new aircraft can be rolled off the assembly line. According to one study, 50% of the customers for Boeing’s new 747-400 are in Asia. The planes are the world’s largest passenger jets and cost upwards of $136 million each. . . . Singapore Airways, for example, has taken delivery of 14 of the new jets and has placed further orders for 15 more. . . . Japan Air Lines has 20 747-400s on order and options on 34 more in a transaction that could ultimately be worth $9.3 billion. . . . China Airlines late last month ordered 36 commercial jetliners and took options on 36 more as part of what is reputed to be the largest international deal in China’s history. . . . Boeing’s latest Asian customer is Korean Airlines, which has agreed to buy 23 747-400s for nearly $4 billion. . . .

Trying to cope with all this travel expansion is proving a massive headache for the region’s airports, which are already operating near capacity. . . .

The worst is Tokyo’s Narita Airport, which handled 20 million passengers last year, a 7% increase. Narita has just one terminal and runway; farmers and environmentalists have managed to stall the remainder of the airport’s construction. . . . Plans are under way to expand Tokyo’s other airport at Haneda by 50,000 flights a year to 230,000, but most of the increase will be for domestic traffic. . . .

Seoul is also benefiting from the traffic pileup at Narita Airport, with airlines such as American and Delta increasingly bypassing Tokyo completely and using Seoul as a regional hub. . . . Delta’s service from Seoul to Bangkok capitalizes on a new phenomenon: tourism within Asia. South Korea only started allowing people under 50 to travel abroad in 1988, and the number of South Korean tourists has already hit 1.5 million a year. . . . Last year, 2.1 million Taiwanese went abroad. . . . The Japanese are still Asia’s most numerous tourists, with 8.5 million going abroad in 1988. . . .

Hong Kong has announced plans for a $16-billion airport and container port terminal off Western Lantau Island to be completed by 1997, just when the British colony is reverting to Chinese rule. . . . The new airport will augment the legendary Kai Tak airport, which is estimated to reach its saturation point in 1994. . . . But the government in Beijing has expressed coolness to the plan because of fears it will get stuck with a massive bill, and that has caused international lenders to hesitate. . . .

Hong Kong has a competitor in nearby Macao, the Portuguese colony, which is opening a $450-million airport across the Pearl River in 1993. . . . The Macao airport offers much less congestion than Hong Kong and easier access to China. . . .

Singapore’s Changi Airport has long been considered the best in the region if not the world, from the fitness center in the waiting area to the free local telephones for passengers and taxi drivers who are required by law to be polite. . . . Changi is building a second terminal that is expected to come on stream later in 1990, capable of handling 4,000 passengers an hour. . . . In typical Singapore high-tech fashion, passengers will be whisked from one terminal to the other by an elevated “Skytrain.” . . . Construction on a third terminal is slated to begin next year. . . .

Just about the only part of Asia left untouched by the air boom is Indochina, with both Vietnam and Cambodia still using runways laid down by the U.S. military in the late 1960s.

Tan Son Nhut Airport in Ho Chi Minh City, formerly Saigon, is a traveler’s nightmare, with chaotic boarding lines that frequently end up in shoving matches or fistfights. . . . Ho Chi Minh City is now served by Air France, Thai International, Air Malaysia, Indonesia’s Garuda and Philippine Airlines, but reservations can still take weeks. . . . Phnom Penh is served only by Air Vietnam and Air Kampuchea operating aging Antonov jets. . . . Thai International has sent a survey team to the Cambodian capital to assess the airport safety for possible future landings. . . . But Cambodia’s political isolation is expected to keep air service at a minimum for several months at least.

Air Travel Growth in Asia

Total passengers in millions

Source: Airport Operators Council International Boeing Prospers From Boom in Asian Travel

Asian air carriers are expanding as fast as new aircraft can be produced. One study says that 50% of the customers for Boeing’s new 747-400 are in Asia.

Orders for Boeing airplanes by Asian countries:

CHINA

CAAC: 737, 747, 757, 767

Shanghai Airlines: 757

Xiamen Airlines: 757

HONG KONG

Cathay Pacific Airways: 747

JAPAN

All Nippon Airways: 747, 767

Japan Air Lines: 747, 767

Government of Japan: 747

Nippon Cargo Airlines: 747