LCCs to dominate APAC aviation by 2015
Low cost carriers continue to grow market share in the Asia Pacific region and are set to dominate the aviation landscape by 2015, according to an industry expert.
CAPA Centre for Aviation executive chairman Peter Harbison told delegates at the Australia Pacific Aviation Summit in Sydney pointed to the success of AirAsia X in the Australian market as an indicator of the trend.
"By the end of this year AirAsia x will become the fourth largest foreign airline in Australia – for an airline that didn't exist 10 years ago and just IPO'd this year, that's a major development," he said.
"It's already overtaken Malaysia airlines in the local market – the flag carrier is changing."
Also speaking at the conference, AirAsia X chief executive Azran Osman-Rani underlined the carrier's intention to double its Australian capacity by late 2014. The carrier confirmed last month that it would commence Adelaide services from October 30.
The number of LCCs present in the Asia Pacific region has risen to 45 accounting for a major proportion of all regional aircraft orders.
Meanwhile, regional full service carriers are "stagnating", according to Harbison.
"That's partly because cargo has gone very quiet," he said. "They're also suffering greatly from traffic being diverted via the Gulf."
He highlighted the main advantages of Middle Eastern aviation product as frequency, the offer of one-stop connections and the new aircraft.
It's a fight that is unfightable, which is why Qantas pretty much succumbed in the end – it realised it was better to join them."
Other carriers are devising different strategies to overcome those obstacles while avoiding heavy discounting. Singapore Airlines was such an example, with its establishment of low cost subsidiaries to tap into the growing market segment.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
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