WLCA Asia-Pacific: Asia-Pacific low-fare carriers face challenges to growth

Infrastructure and deregulation challenges are hampering Asia-Pacific’s low-fare airlines’ – or hybrid low-cost carriers’ – ability to grow further, delegates heard at the World Low Cost Airlines Asia-Pacific conference, taking place in Singapore on 18-19 February.

A number of airports throughout the region are unable to cope with the traffic growth and some airports still see LFAs as “an adjunct to full-service carriers”, a position which needs to change, commented Barathan Pasupathi, chief executive officer, Jetstar Asia. New emerging markets, such as Myanmar, have “great potential but are capacity constrained”, he added.

The sector has seen phenomenal growth, Pasupathi continued, pointing to a 75% increase in total passenger growth at Singapore Changi Airport due to LFA traffic and these airlines accounting for 50% of intra-Southeast Asia seat capacity. “Only 10 years ago the skies across the region were dominated by legacy carriers, but not anymore,” he declared.

The region is still plagued with archaic bilaterals that limit LFAs’ freedom to expand, said Paul Ng, global head of aviation at Stephenson Harwood. “We drag behind us many balls and chains of the past,” agreed Campbell Wilson, chief executive officer of Scoot.

Next year’s ASEAN open skies agreement will not lead to true open skies, argued Wilson, while Jetstar believes it will be at least a two-step process which will hopefully bring long-term opportunities.

Emma Kelly, Asia-Pacific correspondent, Low-Fare & Regional Airlines/LARAnews.net

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