Asia remains ambiguous about low-cost carriers<\/p>\n
Slobodan Lekic, Associated Press\/Jakarta<\/p>\n
While dozens of low-cost airlines in Europe are locked in a
\ndogfight for survival, the concept of no-frills carriers is just
\ntaking off on the Asian and Australian continents.<\/p>\n
The cutthroat competition in Europe has caused at least three
\ncarriers among the more than 50 currently operating at present to
\ngo belly up in recent months.<\/p>\n
And Europe's largest low-cost airline, easyJet PLC, said last
\nweek that competitive pressure led to a loss of 19.7 million
\npounds (US$35 million) in the first half of its fiscal year.<\/p>\n
Still, another two dozen startups are awaiting permission to
\nbegin flying across the EU.<\/p>\n
\"This is a problem that's been brewing in Europe for quite
\nsome time with so many people jumping onto the bandwagon they
\nwere always going to hit a bit of a bump,\" said Peter Harbison,
\nhead of the Center for Asia-Pacific Aviation in Sydney,
\nAustralia.<\/p>\n
While Europe's budget airlines undergo growing pains, Asia's
\nare still in their infancy.<\/p>\n
With an area several times larger than Europe and about five
\ntimes more people, industry analysts say expectations for growth
\nin Asia's budget air travel is tremendous.<\/p>\n
But in many countries, including the region's largest
\npotential market, China, government-held aviation turf is closely
\nguarded, with state-sponsored carriers and other full-service
\nairlines restricting landing slots and effectively shutting out
\nnew entrants.<\/p>\n
A number of other nations have resisted the temptation to
\nderegulate their markets, including South Korea and Taiwan.<\/p>\n
But that hasn't caused a complete standstill in the
\ndevelopment of low-cost airlines in the region. Industry
\nmavericks such as recording industry-turned airline executive
\nTony Fernandes, who runs Malaysia-based AirAsia, have moved the
\nball forward by forging cross-border joint-ventures.<\/p>\n
Earlier this year, Fernandes was cleared for take off to
\nThailand after he teamed up with a company controlled by
\nThailand's Prime Minister Thaksin Shinawatra, allowing Fernandes
\naccess to the Thai market that he couldn't get as a purely
\nforeign-owned venture.<\/p>\n
Although nothing like the explosion of low-cost carriers in
\nEurope, AirAsia and others have had enough success to get the
\nattention of full-service carriers, who have scrambled to start
\ntheir own versions to compete on the low end of the aviation
\nmarket. Thai Airways and Singapore Airlines, for example, have
\nboth started their own budget airlines largely in response to
\nAirAsia's encroachment on their markets.<\/p>\n
Perhaps the biggest success though has come in Australia,
\nwhere the Richard Branson-owned Virgin Blue has taken nearly a
\nthird of the domestic market from Qantas Airways.<\/p>\n
Harbison and other analysts noted that the contrasts between
\nthe nascent Asian budget airline industry and the well-
\nestablished European low-cost carrier scene are so profound that
\nthe two cannot be realistically compared.<\/p>\n
The main distinction is that in Asia no-frills carriers are
\ncreating a completely new market segment by allowing people who
\nwould not otherwise be able to afford air travel to fly for the
\nfirst time in their lives, while the European market was largely
\nmature before budget airlines took off in a big way.<\/p>\n
\"Unlike Europe, there is a massive pool of potential first-
\ntime flyers in Asia,\" said Srboljub Savic, a consultant and
\nspecialist on the Indonesian airline industry.<\/p>\n
He described as \"huge\" the potential for growth in budget air
\ntravel throughout Asia and Australia.<\/p>\n
The best example is Indonesia, he said, where cheap fares and
\nnew destinations have sparked an unprecedented boom in air
\ntravel. At least two dozen budget airlines have taken to the
\nskies since the industry was deregulated four years ago.<\/p>\n
Indonesia expects passenger loads to increase by 20 percent in
\n2004, following a record growth rate of over 40 percent last
\nyear.<\/p>\n
\"Nowadays the ticket between (the northern Sumatran city of)
\nMedan and Jakarta costs about the same as passage on a ship,\"
\nSavic said. \"But while the sea trip takes two days, the flight
\nlasts only two hours.\"<\/p>\n
Hasyim Arsal Alhabfy, a spokesman for Lion Air, the country's
\nfastest-growing budget airline, recalled sitting next to an 80-
\nyear-old woman passenger who had tears streaming down her face.<\/p>\n
\"I never dreamed that in my lifetime I would see the clouds
\nfrom above,\" she answered after Alhabfy asked what was wrong.<\/p>",
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