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Amadeus study shows booming low-cost airline capacity in Asia

Luc Citrinot - 07 November 2013, 00:09

The Amadeus Air Traffic Solution shows that in the first half year of 2013 demonstrates that Asia is the fastest growing region for low cost airlines.

BANGKOK - A recent report about the evolution of air capacities in the first half of 2013 shows that Asia remains the fastest growing region for low cost carriers with seat capacities being up by almost 29%. Asia is followed by the Middle East with seat capacities growing by 17.7% and Africa with 13.1%. Growth in capacity in Asia was positively influenced by Indonesia, India, Thailand and Malaysia. Combined together, the four countries account for over 50% of global LCC seat capacity growth of 6.8%.

Low-cost carriers in Indonesia (capacity up by 12.3 million seats), India (capacity up by 3.0 million seats), Thailand (capacity up by 2.0 million seats) and Malaysia (capacity up by 1.8 million) were responsible for half of total, global, LCC capacity growth. Asia showed the strongest growth rates of any region with a 28% overall increase to reach 129 million departing LCC seats in the first six months of 2013. When capital cities are examined, it is evident that capacity increases are being driven by emerging Asian nations. Jakarta saw the strongest absolute LCC capacity growth of any capital, increasing by 2.8 million seats or 44%, closely followed by Bangkok, up 1.2 million seats or 30%. In addition, the heavily developed Tokyo market also saw a significant increase in LCC seat capacity, which suggests the traditional focus on full service, could be changing.

Alexandre Jorre, LCC specialist, Amadeus, commented: “We see a natural boom in LCC capacity across Asia, where point-to-point air travel is largely underserved. However, across the mature markets of Europe and North America capacity is constrained, which may explain why some LCCs are considering new approaches to secure future growth.”

Asia will certainly continue to experience higher growth rates than in the rest of the world. Earlier this year, Amadeus revealed that low cost carrier penetration stood last year at 18.6%, some 20 percentage points less than Europe (38% low cost penetration) and 12 percentage below North America performance at just 30%. However, Asia is the biggest and fastest growing region with 787 million passengers and 9% growth. Most of the busiest routes of last year were in Asia at 7/10. Asia is also the world’s most competitive aviation market with 75% of routes served by three or more airlines.

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