The Asia Pacific region’s emerging economies, rapid infrastructure growth, and flourishing trade and tourism have triggered a surge in cargo volumes and passenger traffic.
The increase in the number of passengers brings increased threats and makes airport security requirements a top priority, necessitating the development of infrastructure upgrade plans at the facilities, which are improving their security systems to comply with new government regulations and thwart any terrorist threats in the region.
According to Frost & Sullivan Aerospace & Defence Asia-Pacific consultant Amartya De, terrorist threats combined with increased air traffic are driving increased aviation security spending in the region. De says overall homeland security spending across the region is projected to hit US$30 billion by the year 2014, through spending patterns will vary from country to country.
“In terms of investment, the key factors that need to be looked at include the country’s economic condition, infrastructure and skilled manpower through understanding the evolving security threats” globally, regionally and nationally, De says.
Frost &Sullivan estimates that the Asia-Pacific airport security market accounts for 12 percent of total homeland security spending in the region. The company projects that the airport security market will grow from US$5.21 billion in 2008 to US$9.23 billion in 2015.
The three main segments of the market are: airport screening, surveillance and access control. The screening segment is estimated to have the largest share of the overall Asia-Pacific airport security market, followed by access control and surveillance.
“Stringent government regulations, growth of new technology, airport expansion plans and increasing terrorist threats are driving” the airport security market, De says. He notes that new technologies like IP-based surveillance and biometric identification is being used in the region.
Integration of the different systems in different operational areas is considered a key challenge.
There has been significant development in airport infrastructure in the Asia-Pacific region, with the expected opening of many new airports and expansion of others. These developments come with the need to adopt more up-to-date security systems.
“China and India together have planned to develop and construct at least 93 new airports, in an effort to cater for the fast-growing air traffic demand in the two countries,” De says.
Some of the key markets for airport security growth are: Singapore, Thailand, Hong Kong, China, Malaysia, Indonesia and India. Development and expansion of airports have been carried out aggressively across the Asia-Pacific region, especially in Thailand, China, Indonesia, Malaysia, Australia and the Philippines. Prominent projects include massive upgrades at Changi Airport in Singapore and the Diosdado Macapagal International Airport in Clark, the Philippines.
Australia has plans to build new terminals at five of their international airports, with total estimated expenditure of US$6.1 billion from 2009 through to 2015. Sydney, Melbourne and Hobart Airports have already started work. Airport security spending in Australia is expected to reach US$640.2 million by 2015, and by which time spending in Singapore will reach US$298 million.
Vietnam is also looking to develop at least three new international airports and expand seven of its existing terminals from 2011 through to 2020. Vietnam has ambitious plans to become an air traffic hub in South-East Asia.
Japan and South Korea are spending US$9 billion in the same period to expand capacity at three major airports. Incheon International Airport has developed itself as one of the busiest airports in the region and has plans to build an airport city, establishing itself as a major business centre. Spending on airport security is projected to hit US$518.4 million.
Hong Kong International Airport (HKIA) has a five-year development plan and a 20-year plan which is renewed every five years. The facility’s Master Plan 2025 includes long-term expansion projects to accommodate increases in airport passenger and cargo volumes. Security spending will total about US$470.5 million.
Thailand has also firmed up its own airport-development plans, although, to date, only Phuket International Airport and Suvarnabhumi Airport in Bangkok have been identified as targets for development. Security spending is estimated to total about US$411.3 million.
Malaysia is trying to project itself as an aviation hub for low-cost carriers (LCCs). A new, dedicated LCC terminal is currently under construction at Kuala Lumpur International Airport (KLIA), and security spending will be about US$180.6 million.
De says many foreign companies have attempted to enter these markets through partnerships with regional firms, but, with more than 150 competitors in the market, profit margins have been reduced drastically.
He adds that companies should provide value added services like training and support to stay competitive in the market.