Low-cost airlines in China? - Orient Aviation

COMMENT
HERE TO STAY
The potential for a boom in no-frills and low-cost
airline operations in the Asia-Pacific has been the
subject of heated debate for several years.
Many analysts and industry observers doubt the
phenomenal success of budget flying in Europe
and the U.S. can be cloned in Asia’s skies ... and with good
reason. Asia is not Europe with its deregulated air market
that allows airlines free cross-border operations between
a multitude of nations. Neither is it North America, where
the skies are open between the U.S. and Canada (as well as
some South American nations).
In this region, airline operations take place within a
regulatory straightjacket, a plethora of individual air service
agreements and on intra-regional routes. These routes are
already dominated by major national flag carriers whose
rights and profit-making ability are jealously protected by
their government guardians.
There is airport slot congestion and, in many cases, a lack
of sufficient infrastructure at secondary airports to facilitate
opportunity for the secondary point-to-point services on
which low-cost carriers thrive. Some countries, such as Singapore,
have little or no domestic traffic, meaning a budget
airline must necessarily be an international airline to have
any hope of survival.
Despite this, there is clearly a place in the region for
these brash newcomers. AirAsia in Malaysia (helped by the
troubles of Malaysia Airlines) and Virgin Blue in Australia
(its survival assured by the collapse of Ansett Australia) have
proven the point. That big airlines are nervous about lowcost
upstarts cherry-picking their markets is evident by the
emergence of Qantas’ Australian Airlines and the proposed
new no-frills carrier planned by Thai Airways International.
Whether forays by national flag carriers into no-frills or
low-cost subsidiaries will ultimately be successful remains to
be seen. The record for this type of operation has not been
covered in glory in Europe.
What is clear is that Asia-Pacific air passengers are no
different from travellers elsewhere. They want safe, quality
service at the lowest price. For this reason, low-cost airlines
will become a permanent part of the fabric of aviation in
the region.
However, they are unlikely to reach the size or maturity of
a Ryanair, easyJet or Southwest Airlines until intra-regional
air routes are liberalised. Initially, that will probably happen
on a sub-regional basis (such as within Asean).
It will be many years before the Asia-Pacific offers the
European Union-style access new low-cost carriers require
to survive and prosper on a large scale.
TOM BALLANTYNE
Chief correspondent
The Association of Asia Pacific Airlines members and contact list:
Air New Zealand
Chief Executive, Mr Ralph Norris
General Manager Group Communications,
Mr David Beatson
Tel: (64 9) 336 2770 Fax: (64 9) 336 2759
All Nippon Airways
President and CEO, Mr Yoji Ohashi
Senior VP, Public Relations, Mr Koji Ohno
Tel: (81 3) 5756 5675 Fax: (81 3) 5756 5679
Asiana Airlines
President & Chief Executive,
Mr Park Chan-bup
Managing Director, PR,
Mr Hong Lae Kim
Tel: (822) 758 8161 Fax: (822) 758 8008
Cathay Pacific Airways
Chief Executive Officer, Mr David Turnbull
Corporate Communications General
Manager, Mr Alan Wong
Tel: (852) 2747 8868 Fax: (852) 2810 6563
China Airlines
President, Mr Philip Hsing-Hsiung Wei
VP, Corp Comms, Mr Roger Han
Tel: (8862) 2514 5750 Fax: (8862) 2514 5754
Dragonair
Chief Executive Officer, Mr Stanley Hui
Corporate Communication Manager,
Ms Laura Crampton
Tel: (852) 3193 3193 Fax: (852) 3193 3194
EVA Air
President, Ms Kitty Yen
Deputy Senior Vice President,
Mr K. W. Nieh
Tel: (8862) 8500 2585 Fax: (8862) 2501 7599
Garuda Indonesia
President, Mr Indra Setiawan
VP Corporate Affairs, Mr Pujobroto
Tel: (6221) 380 0592 Fax: (6221) 368 031
Japan Airlines
President, Mr Isao Kaneko
Director, Public Relations,
Mr Geoffrey Tudor
Tel: (813) 5460 3109 Fax: (813) 5460 5910
Korean Air
Chairman and CEO, Mr Yang Ho Cho
Managing VP, Corporate Communications,
Mr Jun Jip Choi
Tel: (822) 656 7065 Fax: (822) 656 7288/89
Malaysia Airlines
Chairman, Tan Sri Azizan Zainul Abidin
Tel: (603) 2165 5154 Fax: (603) 2163 3178
Philippine Airlines
President, Mr Avelino Zapanta
VP Corporate Communications,
Mr Rolando Estabilio
Tel: (632) 817 1234 Fax: (632) 817 8689
Qantas Airways
Managing Director and CEO,
Mr Geoff Dixon
Group General Manager Public Affairs,
Mr Michael Sharp
Tel: (612) 9691 3760 Fax: (612) 9691 4187
Royal Brunei Airlines
Chairman, Pehin Dato Haji Yahya
Chief Executive, Mr Peter Foster
Tel: (673 2) 229 799 Fax: (673 2) 221 230
Singapore Airlines
Deputy Chairman and CEO,
Dr Cheong Choong Kong
VP Public Affairs, Mr Rick Clements
Tel: (65) 6541 5880 Fax: (65) 6545 6083
Thai Airways International
President, Mr Kanok Abhiradee
Director, PR,
Mrs Sunathee Isvarphornchai
Tel: (662) 513 3364 Fax: (662) 545 3891
Vietnam Airlines
President and CEO,
Mr Nguyen Xuan Hien
Dep Director, Corp Affairs,
Mr Nguyen Huy Hieu
Tel: (84-4) 873 0928 Fax: (84-4) 827 2291
February 2003, Orient Aviation