New York Times Article - Discount Airlines

[The Mook 105]

http://travel2.nytimes.com/2005/04/24/trav...print&position=

[The Mook 105]

Discount Airlines Spread Wings Across Asia By WAYNE ARNOLD April 24, 2005

 

TOMORROW, Asia's first low-cost carrier, three-year-old Air Asia, is scheduled to make its maiden flight into mainland China, inaugurating a route from Bangkok to Xiamen. The fare is less than $50.

 

The new route underscores where the region's budget airline industry is going. After mushrooming across Southeast Asia in the past year, discount carriers are rapidly spreading to tap great numbers of potential passengers in China and India. There, low-cost airlines based in Singapore, Malaysia and Thailand will compete with domestic budget carriers that are cropping up in both countries. For the cost-conscious traveler, this expansion is creating a network of cheap international connections that make flying around Asia less costly than ever.

 

"It's happened extraordinarily quickly," said Peter Harbison, managing director of the Center for Asia Pacific Aviation in Sydney. Only a year ago, he said, "there was a majority feeling that these carriers would not survive."

 

Back then, many industry observers said the model used by Ryanair that has been followed by other budget carriers in Europe and in the United States would not work across a region as diverse as Asia. The population was too poor, they argued, and the list of potential routes was limited by thorny international agreements. They were wrong. Now there are more than 15 discount airlines flying from Tianjin to Bombay.

 

What the doubters had not anticipated was the pent-up demand for travel between points separated by water. "It's unlike Europe, where airlines have to compete with high-speed rail or the autobahn," said Anthony Chin, a transportation economist at the National University of Singapore.

 

Instead, no-frills airlines offer a quicker alternative to run-down and often dangerously overcrowded buses, ferries and trains.

 

Since 2002, Air Asia, which is based in Malaysia, has expanded its fleet from two Boeing 737's flying domestic routes there to 30 aircraft flying to Thailand, Singapore, Indonesia, the Philippines and now China. It has a subsidiary based in Bangkok and another in Jakarta. The success of Air Asia has spawned imitators. In Singapore alone, there are three new discount carriers - Valuair, Tiger Airways and JetStar Asia. The market is potentially enormous. The Center for Asia Pacific Aviation says that there are 235 cities in Asia with 339 airports capable of receiving the short-haul Boeing 737's and Airbus A320's favored by no-frills airlines.

 

The fares are enticing. Valuair flies from Singapore to Hong Kong, a three-hour, 45-minute flight, for as little as $130 round trip. And while a seat on the full-service Singapore Airlines from Singapore to Bangkok costs roughly $180, without airport taxes, Air Asia recently advertised promotional fares on that route for $2.40.

 

The Bangkok-Singapore corridor has, in fact, become a hotly contested route largely because Singapore and Thailand have dropped regulatory restrictions on each other's airlines as the two countries compete to become the air hub for Southeast Asia.

 

Kuala Lumpur is also vying for this position and both the Kuala Lumpur International Airport and Changi International Airport in Singapore are building terminals to handle low-cost carriers.

 

Farther north, the Hong Kong and Macau airports are competing to become the budget hub into China. But there are indications that the budget carriers may bypass both cities to fly directly to points inside China. Air Asia, for example, plans to add flights from Bangkok to Kunming and Chengdu this year. Nok Air, the discount subsidiary of Thai Airways International, plans to fly from Bangkok to Shenzhen.

 

China's regulators recently began allowing any company with at least three aircraft to operate an airline. That cleared the way for the debut in March of China's first domestic low-cost carrier, Okay, which flies from Tianjin to Kunming and Changsha. At least three other Chinese budget carriers are planning to begin operating this year.

 

India's government has also opened its aviation sector to competition. Already the success of India's first discount airline, Air Deccan, has lured new entrants. Air-India, a national carrier, launched its low-cost subsidiary Air-India Express this year with routes from Delhi, Mumbai, Cochin and Trivandrum to the Persian Gulf. In May, two more budget carriers, Kingfisher Airlines and SpiceJet, plan to start operations.

 

The process is not entirely smooth, however. Air Asia, for instance, has accused Singapore of protecting Changi airport by preventing the Thai carrier from busing passengers to the cheaper Malaysian airport in nearby Johor Bahru, even arresting its drivers on one occasion.

 

For veterans of budget air travel, there will be few surprises - delays, pushy passengers and restrictions on changing reservations are common.

 

But some carriers are blurring the line between no-frills and full service. For example, Valuair, the Singapore carrier, offers reserved seating and free in-flight meals, and flies as far as Perth, Australia, six hours away, for as little as $170. Yet, at the same time - and unlike their predecessors elsewhere - Asia's discount airlines are opting to buy new aircraft. Kingfisher and Air Asia, for example, recently signed deals to buy new Airbus A320's.

 

The biggest headache may be the fact that, to save on agent fees, these airlines generally don't provide information to online agencies such as Expedia or Travelocity; so prospective passengers must visit each airline's Web site and keep track of rapidly changing route networks.

 

Travelers should also make sure that the airline they choose is still around when the time comes to travel. Analysts warn that a shakeout is looming, and the proliferation of budget airlines has already created a shortage of pilots, technicians and flight crew. High oil prices are another problem.

 

The full-service airlines aren't sitting idly by, either. Last month, the full-service carrier, Singapore Airlines, offered Internet fares to points around Asia for the no-frills sounding price of just $60.

Edited April 30, 2005 by themook