Tremendous growth potential predicted for low cost carriers in

Tremendous growth potential predicted for low cost carriers in Asia

Deutsche Presse-Agentur Singapore

The potential for budget travel growth in Asia is so huge a top Singapore minister predicted on Wednesday intra-regional air transit will one day overtake the United States.

Minister for Transport Yeo Cheow Tong noted budget carriers globally are offering 19 percent more flights this year compared to a year ago at the launching ceremony for the low cost terminal at the Changi Airport.

"The potential for growth in Asia is tremendous," he said, adding budget travel in the region is still in its infancy.

A vast proportion of ASEAN's 500 million people have never flown before, presenting a large potential pool of air travelers, Yeo said, referring to the 10-member Association of Southeast Asian Nations.

"If we add the combined population of 2.3 billion in China and India, there is an exciting possibility that intra-Asian air travel will one day overtake even the U.S.," Yeo said.

The ceremony marked the first anniversary of services by Singapore's first low-cost carrier. It was a year ago when Valuair, owned by former Singapore Airline (SIA) executives, took to the skies.

Within six months, Tiger Airways -- owned by SIA, Indigo, Irelandia and the Singapore government's investment arm -- and Qantas-owned JetStar Asia started services.

"The operating environment in Asia is vastly different from that of the U.S. or Europe," Yeo said, citing the regulatory environment among other factors.

"While some countries, such as China, Thailand and Brunei have liberalized their aviation markets, most Asian countries are still very protective of their air rights," Yeo noted.

In outlining the upcoming terminal design and layout, Yeo said, "Low cost carriers do not require many amenities, such as business lounges, travellators or aerobridges... This low cost terminal will ensure that our infrastructure and services suit their business model."

With construction expected to be completed in a year's time, Yeo said the two adjacent single-story buildings will be cheerful and relaxing, with travellers greeted by soothing colors on the walls, floors and decorative ceiling features.

A range of shops will include money changers, retail establishments, food and beverage outlets and duty-free shopping.

The 25,000 square-meter facility will be able to handle about 2.7 million passengers a year.