Research: Growth Expected in Asian Airport Security Markets

Airport security is currently gaining a lot of attention in the Asian Region, reports market research firm Frost & Sullivan. The prospects for investor looks very healthy. The countries in the Asia Pacific region will not be in the dark in this boom period since most of the developed countries are pouring in grants or aids in order to improve airport security. The Civil Aviation Authority (CAA) spent the bulk of its budget in major Asia Pacific countries, 87.3 percent in 2005.

“While these changes clearly point to a bright future for ASE vendors, the sustainability of the ASE industry is very much dependent on continuous research and development (R&D) activities resulting in technology upgrades,” states Frost & Sullivan Financial Analyst Rani Cleetez.

The markets in India and China are particularly promising.

Government spending on ASE reaching approximately $125 million and $1 billion respectively for each of these two countries in 2004.

Airport security has become a critical safety issue for the Chinese government, with heavy investment plans to address the ever-present threat of terrorism in air travel. Estimates are that China will construct 108 new airports in the next five years, for a total of 240 by 2010.

Government plans in India also include building three new international airports in Bangalore, Goa and Hyderabad. The government has allocated more than $10 billion for this upgrade program alone.

The Asia Pacific airport security equipment industry is currently undergoing a growth phase with rising demands from the government as well as the airports. Simultaneously, to remain competitive, participants in the industry are required to invest substantially in research and development, thus increasing costs on this front and inviting more capital investments.