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Asia's budget airlines have grown rapidly in recent years. And while some are faring well, the sector1 faces a bumpy2 ride as economic turbulence3 hits both domestic and international travel.
Asia's low-cost airlines, which took off in good economic times, are facing the stiff headwinds of the global economic downturn.
The International Air Transport Association warns that Asia's aviation industry is in "survival mode," with airlines forecast to lose over $3 billion this year.
Some air carriers focus on domestic market to prevent losses
But some low-cost carriers are doing a bit better than average as more travelers seek to cut costs.
Bruce Buchanan, Jetstar Group's general manager of commercial operations, Tokyo (File)
"That's pretty much what we're seeing in the airline business. We've seen premium4 traffic down - we're seeing the value-based airlines up and succeeding and doing well," says Bruce Buchanan, the chief executive officer of the Australian low-cost carrier Jetstar.
But he says budget carriers in Asia face several obstacles, especially tough regulations and government control over airports and fees.
Still, he says, budget airlines are adapting to the challenges, and working with governments to create opportunities. Jetstar, for one, plans to expand its Singapore operations, creating a strategic hub.
In May, Singapore allowed more flights to the Philippines, especially for low-cost flights, targeting smaller markets such as Cebu and Davao. Traffic between the two countries grew 12 percent last year.
And relaxed regulations have led to more budget flights connecting Singapore and Malaysia.
New policies help financial recovery of some low-cost airlines
Malaysia's Air Asia has been a success story in turbulent times. First-quarter net profit rose by more than 25 percent this year, buoyed5 by a jump in passenger numbers.
John Koldowski, a spokesman for the Pacific Asia tourism Association, says Air Asia's gain must mean pain for some higher-cost competitors.
Tail of a Jetstar Asia plane is seen in the foreground as it steers6 pass two Valuair planes at the Changi International Airport in Singapore (File)
"One would assume in a climate where the pie is not growing that rapidly - if at all - that for them to still be improving their numbers, then they're taking market share from someone else," he said.
But not all budget carriers are doing as well. In Thailand, most airlines struggle because of the global economic slump7, domestic political tensions and the threat of swine flu.
Nok Air, Thailand's state-owned low-cost carrier, has had to refocus on the domestic market, overhaul8 routes, cut overseas services, reduce its fleet and shed staff. From a loss of $16 million last year, it recently reported a six-month profit of over $4 million.
Sehapan Chumsai, a Nok Air executive vice9 president, says the airline's attention will be on the domestic market for the foreseeable future.
"At the moment we have already passed the financial crisis from the fuel crisis last year - at the moment we are back into a good balance sheet," said Sehapan Chumsai.
Budget airlines in India also face tough times.
"India is most certainly going through a difficult stage of repair after a surge in growth, which hit a ceiling of a combination of infrastructure10, too many airlines in too short a time," said Peter Harbison, the executive chairman at the Center for Asia Pacific Aviation in Sydney.
Because of high fuel prices, hefty taxes, and the economic downturn, India's Kingfisher Airlines lost over $200 million in the nine months that ended in December.
Low ticket prices, tough economy cause fierce competition among all airlines
Despite problem areas, the growth of budget carriers across Asia has forced full-service airlines to compete hard.
"The legacy11 [full-service] carriers are fighting back to regain12 market share they'd lost previously13 to the low cost, by offering extremely good deals," said Brian Sinclair-Thompson, general manager in Thailand for Swiss International Air. "The fares we've got on Swiss, the prices are the lowest - I've been here 10 years - we've never had lower fares than we've got today. So I think we're meeting the low-cost challenge."
He says the comfort and service of the big airlines will keep customers coming back.
Still, low-cost airlines have established a special place in Asia's travel industry. But having grown rapidly during the boom years, many budget carriers find the tough economy forces them to rethink expansion plans.
While hoping for an economic recovery, many of them are focusing on domestic markets and short-haul flights to secure a future in the region's skies.
1 sector | |
n.部门,部分;防御地段,防区;扇形 | |
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2 bumpy | |
adj.颠簸不平的,崎岖的 | |
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3 turbulence | |
n.喧嚣,狂暴,骚乱,湍流 | |
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4 premium | |
n.加付款;赠品;adj.高级的;售价高的 | |
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5 buoyed | |
v.使浮起( buoy的过去式和过去分词 );支持;为…设浮标;振奋…的精神 | |
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6 steers | |
n.阉公牛,肉用公牛( steer的名词复数 )v.驾驶( steer的第三人称单数 );操纵;控制;引导 | |
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7 slump | |
n.暴跌,意气消沉,(土地)下沉;vi.猛然掉落,坍塌,大幅度下跌 | |
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8 overhaul | |
v./n.大修,仔细检查 | |
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9 vice | |
n.坏事;恶习;[pl.]台钳,老虎钳;adj.副的 | |
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10 infrastructure | |
n.下部构造,下部组织,基础结构,基础设施 | |
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11 legacy | |
n.遗产,遗赠;先人(或过去)留下的东西 | |
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12 regain | |
vt.重新获得,收复,恢复 | |
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13 previously | |
adv.以前,先前(地) | |
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