How are low-cost carriers in Asia expanding so quickly?
Low costs, lower frills; this is the mantra of low-cost airlines around the world, with the purpose of attracting passengers by giving the lowest airfare prices among full-service airline competitors. Although the low-cost business model is well received by passengers worldwide, Asia has seen the most rapid expansion for low-cost carriers.
In Asia, low-cost models yield great profits.
While budget airlines are now very popular and thriving in Asia, the budget business model was essentially non-existent in the region two decades ago. About a decade ago, low-cost airlines accounted for only 14% of total seat capacity in the Asia-Pacific region, and they accounted for only approximately 30% in 2018. Fast forward a few years, and low-cost carriers now account for more than half of the region’s entire market share. VietJet, Spring Airlines, Jetstar Asia, Lion Air, and HK Express are just a few examples.
Only a small portion of the region’s continually expanding roster of low-cost carriers.
Short-haul, regional services meet the diverse needs of travelers.
Providing low-cost long-distance airline services on occasion.
Other from pandemic factors, why is the low-cost business model surviving in Asia more than in other regions? For starters, compared to other regions, the area lacks an integrated network of convenient rail, road, and sea linkages, making air travel rather necessary when trying to get from one Asian country to another swiftly.
Offering low-cost hybrid services
Though air travel is the most convenient alternative for both pleasure and business customers, paying for a full-service carrier for short-haul flights – such as those between Singapore and Indonesia or Singapore and Malaysia – can be costly and sometimes deemed unnecessary.
Passengers can now pay substantially less for short-haul flights thanks to low-cost carriers. Even if customers want snacks on the flight, a baggage allowance, or a cabin upgrade, the additional costs will be significantly cheaper than paying for a full-service carrier.
Numerous low-cost locations
Another factor is that, unlike most of their low-cost counterparts in Europe, the Middle East, and the United States, most Asian low-cost carriers have a vast network that extends beyond domestic and regional flights, demonstrating how the presence of budget carriers provides passengers with yet another ideal alternative to full-service airlines.
Asian low-cost carriers such as AirAsia X, Cebu Pacific, ZIPAIR, and Scoot have extensive international long-haul route networks that connect their home country to a variety of popular destinations such as Athens, Berlin, Honolulu, Los Angeles, and many more, all with nonstop flights and reasonable frequencies.
Asia’s growing demand and prospects
Finally, laws and infrastructure have been evolving to accommodate the growing influence of low-cost carriers, with key Asian economies such as China and India investing considerably in the development of more regional airports.
When combined with the ever-increasing need for less expensive alternatives to high-cost full-service airlines, whether for leisure or business passengers, the prospects for budget carriers to emerge within Asia are nearly unlimited.
Yet the number of independent budget airlines successfully starting in the past couple years, such as Akasa Air and AirAsia Cambodia, and this year with MYAirline and the highly-anticipated AirJapan, continues to prove so.
