LCCs lead Asian growth

LCC passenger revenues rose 27% in 2011

Asia Pacific’s aviation industry is expanding, with low-cost carriers leading the way.

A forthcoming report from travel industry research authority PhoCusWright found that the region’s airline market is the fastest growing in the world, and low-cost carriers will grow nearly three times faster than traditional airlines across Asia Pacific in 2012.

According to PhoCusWright’s ‘Asia Pacific Online Travel Overview Fifth Edition – Airlines: A Turbulent Ascent’ report, gross bookings saw double-digit growth across all Asia Pacific markets, except Japan, in 2011. But the standout performance came from the region’s LCCs, whose passenger revenues jumped 42% in 2010 and another 27% in 2011. In 2012, PhoCusWright projects LCCs will grow 23%, compared to 8% for traditional airlines.

“While traditional airlines still account for the vast majority of passenger revenue in the region, LCC outperformance over the past several years underscores the impact newer, more nimble carriers are having in the region, especially in the faster growing markets of India and Southeast Asia,” said Douglas Quinby, PhoCusWright’s Senior Director of Research. “LCCs are weathering industry challenges better than their full-service counterparts, and their continued growth and expansion – abetted by the faster growing Asia Pacific economies – are yielding profit margins ahead of network carriers on average.”

By 2013, LCC online gross bookings will reach US$13.3 billion, up 55% over 2011. While AirAsia and Lion Air in Indonesia, Spring Airlines in China, and IndiGo and SpiceJet in India have led the low-cost charge, some network carriers – including Singapore Airlines, Japan Airlines, All Nippon Airways, China Eastern and Qantas Airways – have made big bets to capitalise on the market changes. These have included the recent launch of Peach, Jetstar Japan and Scoot and the forthcoming launch of AirAsia Japan and Jetstar Hong Kong.

The full PhoCusWright report will be released on 24 July.

By Mark Elliott, 20 July 2012, Friday 12:02 AM