Low-cost. Budget. No-frills. Boutique. Whichever name you
prefer, the growth of short-haul airlines offering lower fares, new
routes and easy Internet booking is revolutionizing leisure and
business travel across Asia.
Boosted by relaxed regulatory barriers, an increased demand for
travel both to and within Asia and a surfeit of under-serviced
short-haul routes, new airlines (many financed by flagship
carriers) are springing up from Malaysia to India, Singapore to
Thailand and Indonesia to China. And there is plenty of room for
expansion: Figures from IATA reveal that low-cost carriers (LCCs)
have a 6 percent penetration in Asia, compared to 35 percent in
Europe and 45 percent in the United States.
Leading the way is Air Asia, which has been transformed from
Malaysia’s second national airline into Asia’s leading LCC by
offering access to new destinations at low prices via the Internet.
In March, Air Asia relocated operations to Asia’s first dedicated
LCC terminal at Kuala Lumpur International Airport, and its route
network includes Singapore, Thailand, Malaysia and Macau. It is
also seeking to add to its current single China destination, the
southern port city of Xiamen. Singapore-based Tiger Airways (which
flies from a new, dedicated Budget Terminal at Singapore’s Changi
Airport) is also targeting China and currently offers flights to
two key business cities, Guangzhou and Shenzhen, as well as
Annual low-cost carrier growth in India where, until recently,
an often-quoted statistic was that 16 million people caught a
flight every year, the same number that took a train each day is
expected to hit 15-25 percent between now and 2011.
Last year, five new low-frills operators launched in a market
that now includes Air India Express, Spice Jet and Kingfisher,
which has also introduced a “first-class service,” due to strong
demand. Though much of India’s LCCs offer domestic routes, Jetstar
Asia which serves key Asian cities such as Hong Kong, Bangkok and
Singapore now flies to the Indian city of Bangalore.
Thailand has also embraced low-cost carriers. The opening of
Bangkok’s impressive new Suvarnabhumi Airport scheduled for later
this year will see its predecessor, Don Muang Airport, converted
into a short-haul hub to cater for the nation’s growing number of
LCCs, which include Nok Air and Thai Orient. Flag carrier Thai
Airlines is even considering launching a new “mid-range” airline to
meet the nation’s rising demand for air travel.
Though Bangkok Airlines calls itself a “boutique airline” its
rapidly expanding network and good-value fares offer getaways to
new locations across Thailand and Asia, including Hangzhou and Xian
in China, Luang Prabang in Laos and Siem Reap in Cambodia. It plans
to open more routes later this year and has signed a code-share
agreement with Thai Airways.
China is, for now, a different story: It retains tight control
over its airspace, and LCCs have had a limited impact. Its national
route network is relatively well serviced and landing, airport and
fuel costs are state controlled to protect the growth of its major
carriers and airport capacity is limited. However, stay tuned: Air
industry reforms are under way, and a handful of private airlines
have been permitted to operate, and some of Asia’s leading LCCs now
offer limited routes into China. Crucially, China is currently
constructing around 50 new airports before 2010, which should open
more landing slots and opportunities for LCCs.
Asia’s LCC industry is developing fast and industry watchers
expect some consolidation in the coming years.
So enjoy it while it lasts even some cursory online research
will enable you to offer clients great value deals and access to
established and up-and-coming Asian destinations.