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Demand for budget flights takes off: CAA

GROWING TREND:Budget airlines started serving Taiwan in 2004, and while it took eight years to draw 1 million passengers a year, that number has now risen 10-fold

Staff writer, with CNA

Taiwan has seen a surge in demand for low-cost air travel over the past six years, with the number of passengers on budget flights rising to 10.63 million last year, the Civil Aeronautics Administration (CAA) said on Monday.

Last year, there were 23 local and foreign budget airlines operating in Taiwan, accounting for 18.7 percent of the international and cross-Taiwan Strait carriers serving the nation, the agency said.

The number of passengers last year traveling in and out Taiwan on low-cost carriers was 10.63 million — a sharp increase from 1 million in 2012, the agency said.

Budget airlines started serving the Taiwanese market in 2004, the agency said, adding that while it took eight years to for them draw 1 million passengers per year, the number spiked to 10 million in just six years.

In the first two months of this year, the market share of budget carriers in Taiwan was more than 20 percent, the agency said.

The growth in the number of passengers traveling on low-cost carriers is a trend in Northeast Asia, which would boost demand for air travel in general, Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes, said in Taipei in October last year while giving Boeing’s 20-year market outlook for the region.

“We have seen a surge in the number of flights in the region over the past five years, because of the growing popularity of low-cost carriers,” he said.

He projected that air traffic in the region would grow at an annual rate of 2.6 percent over the next 20 years, citing the rise of budget airline travel.

In Taiwan, the most successful budget airline in terms of passenger volume is Tigerair Taiwan — a subsidiary of national carrier China Airlines — with a 22.5 percent market share, the agency said.

The other top five are Singapore-based Scoot, Japan’s Vanilla Air, Vietnam’s Vietjet Air and Japan’s Peach Aviation, in that order, agency data showed.

Scoot general manager Victor Lee (李育修) said that his airline sees great potential in the Taiwan market and is planning from June 1 to provide an additional two flights per week on its Kaohsiung-Singapore and Kaohsiung-Osaka routes.

“Our market in southern Taiwan continues to grow,” Lee said, adding that Scoot’s average passenger load on the two routes is about 85 percent.

With the addition of the two flights, the airline’s round-trip flights on its Taiwan routes would increase to 56 per week, he said, adding that the airline provides services from Taipei and Kaohsiung to Tokyo, Sapporo, Osaka, Singapore and Seoul.

Vietjet, which has established a subsidiary called Thai Vietjet in Thailand, is considering a similar move in Taiwan, the agency said.

In neighboring countries such as South Korea and Japan, low-cost carriers hold a market share of 30 to 50 percent, it said.

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