Comment
LCCs prove the doubters wrong – and how
September 1st 2013
It is difficult to believe there was a time when some leading industry experts predicted the low-cost carrier (LCC) model would not work in the Asia-Pacific. Read More »
In some markets, such as Japan, Hong Kong and even China, budget flying is still at the early stages of development. But overall, the no-frills business is now a dominant feature of the region’s airline operations.
The Philippines’ largest carrier is an LCC, Cebu Pacific Air. Indeed, apart from a few trunk routes, the country’s domestic operations are dominated by budget carriers.
In the first six months of this year, LCC passenger traffic in Thailand grew 28.65%, to account for 31.08% of all traffic through the country’s six main airports. More than 25% of the traffic through Singapore Changi International Airport is now no-frills.
More than 20 LCCs, including Lion Air, tigerair, Scoot, Jetstar and, of course, AirAsia, have built a web of routes that criss-cross the region from China to Australia, India to Japan and to Korea and beyond. Within a decade it is forecast they will control more than 50% of the region’s traffic.
Most significant of all is that many of these carriers are no longer operating as solo enterprises, forging their own lone, low-cost growth trail along Asia-Pacific airways. Not only do the major players have an array of branded subsidiaries in several countries, but they are cementing partnerships that would have been unthinkable five years ago.
Most interesting of all, the Jetstar Group has more than two dozen interline or code-share partnerships with full-service carriers, ranging from its owner, Qantas Airways, to Emirates Airline, KLM, British Airways, American Airlines, Air Canada, Air France, Cathay Pacific Airways, Lufthansa, Qatar Airways and Turkish Airlines.
As Jetstar Group chief executive, Jayne Hrdlicka, said: “If you are flying economy on a full service carrier [from Europe] into Singapore and boarding Jetstar out of Singapore, it is pretty much the same.”
There is little doubt that even in embryonic budget markets such as Japan and Hong Kong the budget boom will continue. It makes sense for legacy carriers to have their own LCC offshoots and also find ways of working with the budget brigade to improve and expand their own businesses and networks.
