Mon, Mar 14, 2011 - Page 11 News List

Budget carriers open Asia’s skies

GROWTH REGION:Airbus said that it expects Asia to account for a third of new airplane sales in the next 20 years and the firm says low-budget airlines are integral


A Cebu Pacific airplane passes behind buildings as it makes its approach for landing at the International Airport in Manila on Feb. 7.

Photo: AFP

A decade ago, even some of Asia’s wealthier people could face a long bumpy ride on a bus to visit family or take a break on the beach — flying was simply too expensive.

Not any more. The proliferation of low-cost airlines across the region, particularly in Southeast Asia, has opened up air travel to the masses.

Malaysia-based AirAsia Berhad, which launched in 2001, was one of the first airlines to rip open Asia’s skies to the general public.

“Suddenly, people who had never been on planes — people who lived in villages and used to go on a 12-hour bus ride to see relatives — suddenly they were flying,” Airbus SAS’ Asia communications director Sean Lee said. “If the same thing happens in China, India and Indonesia, with their massive populations, imagine — the potential is huge.”

So huge, in fact, that Airbus predicts that a third of all new planes will be sold into the region during the next 20 years — 8,560 aircraft worth a cool US$1.2 trillion. The company has a backlog of more than a thousand aircraft waiting to be delivered to the region. Of those, AirAsia has 175 firm orders for A320s, with a further 50 on option.

The airline continues to expand with the opening of three hubs in Kuching in the east Malaysian state of Sarawak, Chiang Mai in northern Thailand and Medan in Indonesia. It is also launching operations in the Philippines later this year.

“For 2011, our plan is to further expand our route network and key routes,” AirAsia’s chief executive Tony Fernandes said. “We also plan to be more aggressive in penetrating the Indian market and further expansion in China.”

Cebu Air Inc, the Philippines’ already long-established low-cost carrier which operates as Cebu Pacific, plans to invest US$1 billion in 21 new Airbus airplanes and hire 2,000 more staff during the next four years to boost its international operations.

Meanwhile, Singapore’s low-cost carrier, Tiger Airways, will take delivery of 26 aircraft by the end of March, the company said.

India has eight budget airlines, which have gained nearly half of the market share in the country’s rapidly growing aviation sector.

IndiGo, launched in 2006, is the country’s youngest airline, but has already become the third largest, flying 8.4 million passengers last year, a 16.5 percent share in domestic air traffic.

The airline announced a deal for 180 A320s, the largest number of Airbus planes ever bought in a single order, at the Paris Air Show this year. IndiGo currently operates only domestic flights, but has ambitious targets for this year, planning to start flying internationally in August after recently getting government clearance. Large scale models of the Airbus suite of aircraft were on display at the Asian Aerospace Expo in Hong Kong, alongside rival Boeing Co and the Chinese upstart Commercial Aircraft Corp of China (中國商飛), which has its own aircraft on the drawing board if not yet in the sky.

All will be competing for a slice of this massive market, which will soon overtake both Europe and North America.

Airbus predicts a need for 5,200 new airliners in the single-aisle 100 to 210 seat category, such as the A320 family. Of these, about a third would go to low-cost airlines.

The increase would be driven primarily by the growth of low-cost carriers, as well as the opening of new secondary short-haul routes, especially in China, India and Southeast Asia.

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