Future is Bright for Asia’s Budget Carriers: CAPA

SINGAPORE ~ Low-cost airlines in the Asia Pacific are expected to double market share to 25 percent by 2012 after a slew of aircraft orders, as they increasingly challenge their full-service rivals, a regional consultancy has said.

Based on known orders, the region’s budget carrier fleet would increase from about 300 aircraft with 45,000 seats to around 870 planes with 170,000 seats by 2012, the Centre for Asia Pacific Aviation (CAPA) said in a commentary.

“A swag of new orders by Asia Pacific LCCs (low-cost carriers) will propel the sector to 25 percent of total seats in the region within five years – double their current penetration,” the research and consultancy firm said.

“LCCs are set to continue to challenge full-service rivals in short-haul markets and increasingly long-haul segments in the region,” it added.

“The battle is set to intensify.”

CAPA said its growth calculation did not include major orders by Indonesia’s Lion Air and Hong Kong Airways.

Among regional budget carriers with fresh orders are Singapore-based budget carrier Tiger Airways, which has signed a memorandum of understanding to buy 50 Airbus A320 aircraft.

Indonesian group Mandala Airlines has also ordered 25 A320s, in a deal worth US$1.9 billion at catalogue prices.

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