Peter Harbison, executive chairman of CAPA, titled his keynote talk, “Australia on the edge of Asia”.

Which led Alan Khee-Jin Tan, Professor of Aviation Law at National University of Singapore, on a subsequent panel to say something to this effect – “Come on, guys, you’re not at the doorstep or edge, you are part of Asia – unless it’s for you to close the door when you want.”

And so even in 2013, in the midst of the Asian Century, Australia reminds me of a shy boy eager to court a young girl for her wealth and beauty but not daring to take the plunge …

But then Australia is not alone in holding back from full commitment – so is ASEAN. Tan is concerned that the ASEAN Open Skies Treaty of 2015 will be true in name only – Indonesia is staying out of the arrangement, he said, being concerned that traffic will be bled by Malaysia and Singapore.

The project, he said, stops with third and fourth freedom rights, yet its success depends on seventh freedom rights, which is not even on the negotiating table

The bright spark is with Lion Air growing and Garuda Indonesia improving, “there will come a time when they want more access as well”.

Tan also warned that ASEAN carriers signing separate bilateral agreements with China, giving away third and fourth freedom rights, were disadvantaging themselves in the long run. “They can fly from any Chinese point to any ASEAN point, yet ASEAN carriers are limited and can only fly from their home point to any Chinese point.”

This, he said, would hobble ASEAN carriers in the long run – “they haven’t come to grips with the need to think of the backyard as common single market and intra-ASEAN rivalry and bickering will only hamper the region.”

Panel discussion

AirAsia X, meanwhile, is not playing the shy suitor as far as Australia is concerned – it already is the fourth largest foreign airline to the continent and CEO Azran Osman-Rani said with plans to double its fleet next year, Australia, already 35% of its business, would only grow.

The airline intends to add double daily frequencies and this, he said, would unlock the full potential of longhaul connectivity from the AirAsia group.

In Harbison’s view, there will be a clear dominance of low cost (longhaul) in Asia by 2015. Already, he said low cost formed 58% of air seats in South-east Asia and full service airlines in the region were stagnating – caught between the Gulf carriers taking premium longhaul traffic and low cost airlines expanding to absorb shorthaul traffic flow.

“Asia’s main traffic growth is from people who demand lower priced travel,” he said.

The missing piece of the puzzle – airports. NUS’ Tan said that even though the hub policies of Malaysia, Singapore and Thailand were forward-looking, “they haven’t really figured out the full impact of LCCs – there’ve been half-hearted attempts to build budget airports and there is still a fixation with full service carriers.”

Don Muang in Bangkok was a good start and in Indonesia, consider Medan as a possible hub between Australia and Europe. “It is every bit as strategic, if not more so than Kuala Lumpur or Singapore.”

As for how Australia can take part in this growth, Robert Bailey, CEO of Abacus International, singled out Indonesia as its most promising bet, calling it a sleeping giant, and panellists wondered what happened to Australia’s dual-language education in the past when Indonesian was one of the languages taught to kids.

Andrew McEvoy, CEO of Tourism Australia, who moderated the panel, agreed “we have lost our way” in terms of dual-language education.

China of course also came up – and AirAsia X’s Azran said, “Think of China not as one country but as city markets. Every city is three times bigger than yours in provinces which are five times bigger than Australia.”

So it seems to me that not only is full commitment needed for any potential to be fully realized, it also requires mindset changes. Yes, Australia and ASEAN, don’t be shy – take the plunge. Australia, be part of Asia and ASEAN, time to think one backyard.

Hopefully then we can all live happily ever after.