Asian No Frills Airlines
Phil O'Sullivan
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Singapore Airlines is teaming up with the founder of Europe's Ryan Air to offer no frills flights around Asia. Singapore Airlines is the biggest Asian carrier to begin courting budget travelers, but it's certainly not the first. Andrew brown looks at the growing list of companies offering cheap flights in the region.
Passengers on Cebu Pacific's flights between Hong Kong to Manila have a lot of fun. Once the plane's taken off and the meal's been served, members of the crew start singing. And passengers chip in with their own performances as well.
You won't find expensive in-flight entertainment systems on Cebu Pacific -- the airline wants to keep its operations lean, and passes the savings along to customers.
"I think its awareness of the importance of the importance of efficiency. Other airlines are still experiencing inertia from their old lives," says Cebu Pacific's bong Mojica.
Asia has no shortage of low-cost carriers. A 2003 study named more than half a dozen currently operating, and cited another four being launched late this year or in the first half of 2004.
Recently Qantas announced it would also deliver discount air travel with a carrier called Jetstar. Singapore Airlines has announced its new Tiger Airways will soon begin no frills flying. Even though the Asian airline industry remains highly regulated, governments have been supportive of upstarts like Cebu Pacific, Malaysia's Air Asia and others. Analysts like JP Morgan's Peter Negline aren't surprised.
"From a political or electoral perspective it's very popular if you are bringing people significantly reduced cost of domestic transport."
It's no longer just domestic transport though. Thailand is set to become a hub for at least one low-cost carrier that will serve both domestic and regional routes. And Cebu Pacific, which already flies to Hong Kong and Seoul, plans scheduled services in China. It also has big international ambitions.
"We want to make Cebu Pacific part of the showcase of the Philippines," says Mojica.
Analysts admit they don't know for sure what this will mean for Asia's flag carriers. But researchers at JP Morgan point out that established airlines have several different revenue streams, which would help them in a price war.
"The incumbents will always have a cargo capability. A premium class capability, and that gives them the opportunity to appeal to a lot of different market places," says Negline.
The good news for passengers is airlines are already under pressure to offer more choice.
