iowa744fan
Posts: 906
Joined: Sat Apr 03, 2004 1:31 pm

LCC Potential In Asia

Fri Aug 27, 2004 3:49 am

I was wondering about everyone's opinions on the potential success of LCCs in Asia. I know that Air Asia has had success thus far and that some of the Japanese domestic LCCs have done ok. Plus, it has made some carriers like Singapore and Thai nervous enough to start their own LCCs. However, I keep wondering about the long range success for LCCs across Asia.

Specifically, do you ever see the LCCs seriously challenging many of the "Goliaths" in the area like Singapore, Cathay Pacific, JAL, ANA, Korean, etc? While some areas of SE Asia are quite accessible, as shown by Air Asia, I have a hard time believing that many of the major cities will be strongly effected. Take Hong Kong for instance. I know that Orient Thai serves HKG and that they are a LCC, but due to the operating costs at Chek Lap Kok (and airports like Kansei, Changi, Narita, etc.), what are the chances that many other low fare carriers would start major operations there. Macau is close by and Air Asia did begin service there, but with jetfoil service from Hong Kong to Macau still taking about an hour, do you think that many people from Hong Kong will travel to Macau to fly out? Does anyone know what the access into China is like for LCCs? What is going to happen in places like Bangkok when the new airport opens (is Don Maung still going to remain open and be a lower cost alternative or is it being closed?). What is the potential for getting someone wanting to fly from Hong Kong to Singapore to take a jetfoil to Macau, take a flight to Johur Bahru (via Bangkok), and then drive into Singapore? Granted SQ's lcc could fly nonstop from Macau to Selatar Field.

Anyway, I would be interested in hearing some opinions, details, or other bits of info about the LCCs in Asia. Thanks.
 
aviasian
Posts: 1244
Joined: Mon Jan 08, 2001 8:11 am

RE: LCC Potential In Asia

Fri Aug 27, 2004 12:41 pm

HKG to SIN is already served by Valuair. If you go from HKG to Macau via jetfoil, catch a flight to BKK and transfer to flight to Johor Bahru and drive to SIN, you will be spending a whole day doing so . . . and possibly pay far far more than even a direct HKG-SIN flight on a legacy carrier. To do this and still find it worthwhile, you must be a rich aviation enthusiast  Smile

India is the next country you will see a sudden explosion of LCCs - Air Deccan (ATR72s / A320s), Kingfisher Airlines (A320s), Air India Express (B738s), Alliance Air (reportedly converting to LCC ops), Go Airways (to be started up by the Wadia Group) and Indus Airways (to be started up in the Northern parts of India). You can certainly expect to see Tiger Airways (Singapore) and AirAsia (Malaysia) operating to India too.

Thailand's crop of LCCs - One-Two-GO (B757 / B743), Nok Air (B734) and Thai AirAsia (B733) are struggling on basically just two routes - BKK to Phuket and BKK to Chiang Mai and a small number of very minor routes. Air Andaman has already gone under but still hopes to re-start with Australian investment.

China is one explosive market for LCCs - just that it somehow hasn't quite happened yet. Perhaps someone from HKG is closer to the action and could tell if any of the new airlines (including Shilin Airlines - translated as "Stone Forest Airlines" based in Kunming, Spring Airlines etc) are LCC models.

KC Sim
Bangkok



 
HB-IWC
Posts: 4033
Joined: Fri Sep 22, 2000 1:09 am

RE: LCC Potential In Asia

Fri Aug 27, 2004 3:33 pm

In Indonesia, the LCC model has been booming in the past couple of years and has had little or no detrimental effect on the established carriers like Garuda Indonesia. Rather, the LCC model has moved people away from traveling by ship or bus to flying. So the impact of the LCC model was a staggering 100%+ increase in the number of passengers carried over a 4-year period. Prices have also come down dramatically. At the same time, there have been an abundance of 'issues' with some of the new airlines, related to safety and reliability. As in Indonesia, I think there's a bright future for the LCC model in several domestic markets around. India and China definitely come to mind, and signs are already there of a burgeoning LCC market.

On the international side, however, opportunities, although existing, are smaller. Distances in Asia are typically much longer than in Europe. A Singapore-Hong Kong non-stop takes 3+ hours, and LCCs can operate few flights a day. Valuair, with a fleet of 2 A320s is currently operating 5 daily roundtrips only.

Furthermore, the number of potential routes in not unlimited and with the likes of One-To-Go, Thai Orient, Nok Air, Thai Air Asia, Air Asia and Lion Air already vying for market share, and with both SQ's and QF's LCC offspring to join them in the near future, things are bound to get crowded and saturated.

On the other hand, Singapore seems to be preparing itself for a dramatic increase in the number of LCC operations. Changi Airport recently unveilied plans for a dedicated LCC terminal, with lower cost and facilities to improve the typical LCC operation.

All in all, I believe we haven't seen the last of the LCC phenomenon in Asia. More development will succeed each other rapidly, with new airlines entering the market and airports adapting themselves to accomodate LCC operations.

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