Dozens of low-cost airlines set for takeoff in Asia
Dozens of low-cost airlines set for takeoff in Asia
Associated Press
Singapore
Asia is set for explosive growth in the low-cost airline
business with dozens of new entrants taking to the skies and
governments racing to liberalize their airspace, a leading
aviation analyst said on Thursday.
The growth will push down fares, raise demand for air travel,
and prompt most full-service carriers to fight back with their
own low-cost arms, said Peter Harbinson, Managing Director at
Sydney's Center for Asia Pacific Aviation.
"The growth potential is actually quite enormous. What
percentage of that will low-cost airlines take? God knows. But
they are going to be very important in stimulating overall market
growth," Harbinson told The Associated Press.
There will be "dozens, dozens in the next five years," he
added.
No-frills air travel - where companies cut perks for
travelers, slice costs, trim turnaround times, and sell more
tickets through low-cost channels - emerged in the United States
in the 1970s and spread to Europe in the 1990s.
The business model has made inroads in Asia in the past three
years, led by companies such as Malaysia's AirAsia, Australia's
Virgin Blue, and recent Singapore entrant Valuair.
At least two more discount operators are set for launch in
Singapore later this year: Tiger Airways, backed by full-service
flag-carrier Singapore Airlines, and a rival supported by
Australia's Qantas Airways.
India - home to more than a billion people - has great
potential, provided that authorities loosen rules governing which
airlines may fly which routes, both domestically and abroad, he
said.
"We are working on a couple of low-cost airlines ourselves
there. We know of at least a half a dozen others in the Indian
domestic market, that is the scale of this. And they are popping
up all over the place," Harbinson said.
Air Deccan, based in the southern Indian city of Bangalore, is
already offering cheap travel, and Air India Express, subsidiary
of flag carrier Air India, is due to start flying by year-end.
Harbinson said there is growing commercial pressure on
governments to ease restrictions on access to international air
routes.
"The pace (of growth) will really depend on how fast the
market liberalizes, how quickly you can get access to new
routes," he said.
The latest sign of improved air access came on Thursday, when
the governments of Singapore and Malaysia agreed to try to boost
the number of flights between the neighboring countries, Bernama,
Malaysia's official news agency, reported.
"The more we can strengthen air links between Singapore and
Malaysia, the more we can facilitate tourism and investment
flows," the report cited Singapore Transport Minister Yeo Cheow
Tong as saying after talks with his counterpart in Kuala Lumpur.
In Singapore, the entrance of low-cost players on routes to
Bangkok and Hong Kong has prompted price cuts by established
carriers, blurring the distinction between the industry segments.
"We aim to offer bargains whenever there are capacity
opportunities," said Wong Hong, area vice president for Singapore
at Singapore Airlines.
The state-backed company now offers partially restricted
round-trip flights to Indonesia and Thailand for as little as
S$150 (US$87), up to 25 percent cheaper than earlier regular
fares.