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This is one of several Wikitravel articles about Discount airlines .
Asian carriers have often offered lower fares than their European or American rivals. Now they are starting to catch the wave of discount airlines. pioneered in Europe and the US. In South-East Asia. an ASEAN-wide open skies agreement is in the works, but in the rest of the continent flights are still severely restricted by bilateral agreements.
NOTE: All fares quoted below are one-way (except where noted), include taxes and charges, and are widely available. Flight destinations may change and airlines may go bust without notice.
SOUTH-EAST ASIA’S low-cost airlines have gone from feast to famine. Cheap, short-haul, no-frills flying came late to the region, but people have taken to it eagerly. In just ten years, according to the Centre for Asia Pacific Aviation (CAPA), a research firm in Sydney, low-cost carriers’ share of the region’s aviation market has soared from almost nothing to 58%. In Europe, where cheap airlines have been flying for much longer, easyJet and its fellows account for only about 40%. Now South-East Asia’s skies are looking crowded.
The rise of low-cost carriers reflects pent-up demand for flying in an increasingly well-off part of the world. This year another 12 such airlines may join the 47 already flying in the Asia-Pacific region. This week it was reported that Beijing is planning a new, $14 billion airport. In South-East Asia growth has been particularly strong: many of its 600m people live in large archipelagic countries, such as Indonesia and the Philippines, where flying is the easiest way to get around. Of the world’s 15 busiest low-cost international routes, nine are in South-East Asia. All this demand requires aeroplanes: CAPA says South-East Asia is the only region where there are more planes on order than in existing fleets.
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However, the expansion of airlines’ capacity seems to be getting ahead of the growth in demand. Some low-cost carriers are struggling to fill their seats. Plusher airlines are feeling the pinch, too: this week Cathay Pacific said that despite strong long-haul profits, competition from budget airlines was starting to hurt it on short-haul routes. Singapore Airlines expressed similar worries earlier this month. Con Korfiatis, former boss of Jetstar Asia, the low-cost arm of Australia’s struggling Qantas, believes that “the growth in the market will definitely be there, it’s just a matter of introducing too much capacity too soon.”
On May 2nd Singapore-based Tigerair announced a loss of $177m in the year to March, up from $36m the year before. Several of its national affiliates, notably in Indonesia and Singapore, have fared particularly badly. The company is grounding planes and cancelling orders. AirAsia, usually the most bullish of low-cost flyers, has also said it is deferring deliveries of new planes and concentrating instead on cutting costs. Jetstar Asia says it has suspended all growth plans until market conditions improve.
Tigerair blames the industry’s overcapacity for its difficulties. But another problem is that the carriers’ costs are not as low as they would like. Most of South-East Asia’s showy, expensive airports are running at full capacity, overwhelmed by unpredicted millions of passengers. New landing slots are desperately hard to find. Unlike Europe, the region has few smaller, cheaper or disused airports that low-cost carriers can use.
Despite the gloom, part of the market still looks promising. Two of the carriers expected to take off this year, NokScoot and AirAsiaX, both joint ventures based in Thailand, will be offering medium- to long-haul flights (ie, lasting more than four hours). Although the short-haul market is saturated, this business still has plenty of room to grow.
Scoot, the low-cost arm of Singapore Airlines, and Cebu Pacific of the Philippines have also been exploring this business. Campbell Wilson, Scoot’s boss, says that adding just one Scoot flight a day to the existing seven full-service trips between Singapore and Sydney pushed up total passenger numbers on the route by 32% in six months. That is impressive, but margins are tight on low-cost long-haul, because passengers expect more comfort on longer journeys. No one has yet worked out how to make money on these flights. Two new, fuel-efficient aircraft, Boeing’s 787 “Dreamliner” and Airbus’s A350, could just change that. Let battle commence.
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