Wed, Jun 20, 2012 - Page 12 News List

The new friendly skies

The Asia-Pacific region is one bright spot for the global airline industry, as low-cost airlines are ‘popping up faster than ever’

By Bettina Wassener  /  NY Times News Service, Singapore

A Jetstar Japan Co flight attendant opens an overhead storage bin in the economy class cabin of the company’s Airbus SAS A320 aircraft during a media preview at Narita Airport in Narita City, Chiba Prefecture, Japan, last week. Jetstar Japan, a budget carrier backed by Qantas Airways Ltd. and Japan Airlines Co, is one among a number of emerging budget airlines in the Asia-Pacific region.

Photo: Bloomberg

The airline industry is suffering from global economic turmoil. But people like Kelvin Mok, who just graduated from college in Hong Kong, are helping to ensure that in Asia, at least, the sector is continuing to grow.

Mok and seven of his friends were headed to Thailand last weekend for a 12-day graduation trip that will take them to Phuket, Bangkok and Chiang Mai, on several flights on AirAsia, a regional low-cost airline.

Or consider Venkateswara Konduru, who comes from Bangalore, India, and works in the information technology sector in Hong Kong. Konduru’s wife and two children were visiting him in Hong Kong and flew back to Bangalore on Dragonair, a subsidiary of Cathay Pacific.

Europe is struggling to contain its debt crisis. Many Americans are jobless. Consumers are thinking twice about buying plane tickets. And freight volumes have slumped.

Still, although the once rapid pace of growth in China and India has slowed, airlines in the Asia-Pacific region will generate profits of US$2 billion this year, according to forecasts published Monday by the International Air Transport Association. That is far more than airlines in any other region.

And new airlines are popping up faster than ever.

The latest is Scoot, a no-frills offshoot of the venerable and proudly high-end Singapore Airlines. Scoot’s first flight took off from Changi Airport in Singapore on June 4, carrying about 400 passengers to Sydney, Australia.

Two more low-cost airlines, AirAsia Japan and Jetstar Japan, are scheduled to start flying within weeks. Peach, a low-cost airline in Japan, started flying in March. And a venture by China Eastern Airlines and Qantas is in the pipeline for next year.

Are the skies above Asia big enough, and are the pockets of Asian consumers deep enough, to support more airlines?

Many airline executives and analysts say they are, because of a combination of rising affluence that has created a growing middle class; the construction of many more airports; more affordable tickets; and the region’s vast geography.

Scoot, for one, was undaunted by the economy as it began commercial operations last week.

Bookings are solid, Scoot’s chief executive, Campbell Wilson, said in an interview in a bustling coffee shop at Changi Airport here.

In part, the burst of activity in Asia shows that the region is still catching up with Europe and the United States.

In particular, no-frills airlines resembling those that shook up the U.S. and European markets in the 1970s and ‘80s have been flying in Asia only since 2001, when AirAsia introduced the concept locally from its base in Malaysia. Much of the recent growth in Asian airline activity has been in the low-cost sector.

But Asia’s airline boom also reflects the rapid growth of many of the region’s economies.

Just five years ago, Asia-Pacific airlines had a combined total of 3,800 passenger planes. That number has increased to 5,600, said Corrine Png, head of regional transportation research for JPMorgan Chase in Singapore, who estimated that at least 10 airlines had started in the region in the past decade. She expects the low-cost airline market in the region to grow to US$23 billion, or about 30 percent of the overall market, by 2014 from $18 billion now.

Beijing could soon overtake Atlanta as the world’s busiest airport in passenger traffic. In 2001, Beijing was not even among the world’s top 30, according to the Airports Council International.

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