How are low-cost carriers expanding so rapidly in Asia?
Low costs, reduced frills; this is the motto of low-cost airlines around the world, with the purpose of attracting passengers by giving the lowest feasible airfare pricing among full-service airline competitors. Although the low-cost business model is well received by passengers worldwide, the most rapid expansion for low-cost airlines occurs in Asia.
In Asia, low-cost approaches lead to high-profit success.
While budget carriers 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 area, and they were only approximately 30% in 2018.
Fast forward to the previous several 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 examples of low-cost carriers.
Only a small portion of the region’s ever-expanding roster of low-cost carriers.
Short-haul, regional routes are used to meet the diverse needs of passengers.
Occasionally offering low-cost long-distance flying services.
Other from pandemic factors, why is the low-cost business model thriving more in Asia than in other regions? To begin with, the region lacks an integrated network of convenient rail, road, and sea linkages when compared to other regions, making air travel rather necessary when trying to get from one Asian country to another swiftly.
Delivering hybrid services at a cheap cost
Though air travel is the most convenient alternative for both pleasure and business travelers, 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 far less for short-haul flights thanks to low-cost carriers. Even if consumers want snacks on the flight, a baggage allowance, or a cabin upgrade, the add-on charges will be significantly lower than paying for a full-service carrier.
There are numerous low-cost places.
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 beyond domestic and regional flights, demonstrating how the presence of budget carriers provides yet another ideal alternative for passengers compared 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 numerous popular destinations such as Athens, Berlin, Honolulu, Los Angeles, and many more, all with nonstop flights and relatively convenient frequencies.
Asia is seeing increased demand and potential.
Finally, laws and infrastructure have been evolving to accommodate the growing influence of low-cost carriers, with major 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 practically infinite.
Yet the number of independent budget airlines that have successfully launched in recent years, such as Akasa Air and AirAsia Cambodia, as well as this year’s MYAirline and the highly anticipated AirJapan, continues to demonstrate this.
