Air traffic growth in the Northeast Asian region will be mainly driven by LCCs, according to an executive from airplane maker Boeing.

“As we look at growth in the future, we expect that growth to be driven by airlines in the emerging and developing economies, as well as low-cost carriers,” Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, told reporters at Boeing‘s offices in Seoul on Monday.

Together, the air travel traffic in Korea, Japan and Taiwan are expected to grow by about 2.2 percent annually over the next 20 years, according to Boeing’s Current Market Outlook. 

By 2036, Northeast Asia will need nearly 1,500 new airplanes valued at $320 billion, with 45 percent of those orders being for single-aisle aircraft.

“Most of the demand for single-aisle airplanes will be from low-cost carriers. I would say when we look at growth moving forward, almost all the growth will be driven by LCCs,” Tinseth said.

Boeing is currently working to develop more efficient single-body planes to serve this market such as the 737 MAX10, which Tinseth said offered a 5 percent lower operating cost than its competitor -- saving airlines approximately “$1 million every year.”

For now, most of the deliveries being made to Northeast Asia from Boeing are for replacement as more efficient aircrafts continue to enter the market.

Tinseth declined to speculate on the effect of new LCCs potentially entering the Korean market but acknowledged the large number of LCCs in Korea compared to other regions. Currently, new airlines such as Aero K and Fly Yangyang are awaiting approval from the Transport Ministry to begin services.

“I can tell you that today in the LCC market here, in the region, throughout the global market, there is intense competition. ... There will be winners and losers, and at the end of the day there will be some rationalization in the marketplace,” he said. 

By Won Ho-jung (hjwon@heraldcorp.com)