Low-cost airlines become more popular

LOW-FARES: When Malaysian businessman Tony Fernandes launched a no-frills, low-cost airline in 2002 with only two planes, few people realised the effect it would have. From only four routes, Air Asia set off a low-fare revolution that changed the face of the airline industry in the region. It is a stunning success story and now has 35 aircraft and flies millions of passengers across south-east Asia every year.

However, over the past four years it has been joined by more than 30 new low-fare carriers in Thailand, Singapore, the Philippines, Indonesia, India, China and Japan.

Who would have believed a few year’s back that a flight ticket from Bangkok to Singapore would be on offer for as little as US$30? As the number of people flying has increased, so has the demand for hotel accommodation and other products.

The region’s hotels are experiencing boom times as more people can afford to visit. Both Hong Kong and Macau are due to launch budget carriers later this year, but they will also be tackling the lucrative routes to Europe and America.

Oasis will be Hong Kong’s first low-cost carrier. It aims to fly non-stop to London, Milan, Berlin and Cologne in Europe and Chicago and Oakland in the USA. Viva Macau, due to launch in summer, is aiming to bring tourists to the islands’ casino resorts from Europe, the Middle East, North America and Africa.

What makes a low-cost carrier? Traditionally, it offers low fares in exchange for cutting back on traditional services. You should not always expect to get a reserved seat, a free inflight snack and drink or even watch an inflight movie, but on some Asian budget airlines you can get all of this and still pay the low fare.

The airlines cut costs by sticking to one or two types of aircraft, achieving faster turnaround times at airports and by selling tickets over the Internet, eliminating commissions paid to travel agents. Most tickets are sold on a sliding price scale; the earlier you book, the cheaper the seat.

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