Format Competition
After wave of new low-cost carriers, booming Asia sees launch of premium business carriers
15 December 2011 | GDP growth, increased trade flows, the rise of a new middle class, and market liberalization are the main drivers behind the rapidly growing demand for air travel in Asia Pacific over the coming decade. Airbus, for example, projects that by 2030 the region will account for 33 percent of worldwide revenue passenger kilometres, up from 28 percent today.
The growth in the region’s aviation market is resulting in a large number of new airline launches. In the past year, full-service airlines such as ANA (Peach, AirAsia Japan) and JAL (Jetstar Japan) have announced their own low-cost initiatives in order to take advantage of market deregulation in Japan, while the region’s largest LCC’s – AirAsia, Jetstar and Lion Air – continued their expansion. Singapore Airlines, meanwhile, has launched a low-cost long-haul subsidiary, called Scoot.
At the other end of the spectrum, the region’s booming economies and the resulting growth in business travel have led ‘challenger airlines’ such as Skymark from Japan (low-density A380) and Hong Kong Airlines (Hong Kong – London ‘Club’ service) to announce all-premium long-haul flights, while in Southeast Asia, Qantas, Malaysia Airlines and AirAsia founder Tony Fernandes have all revealed plans to set up their own regional premium carrier.
Qantas ‘Red Q’
Because of intense competition from Gulf-based and Asian carriers, Qantas’ international market share in Australia has fallen from 39 to 14 per cent over the past decade. The airline’s cost base for its international operations is said to be 20 per cent higher than that of its competitors. With its dominance at home eroded, Qantas in August 2011 announced a plan to establish an Asian hub, which is is expected to reduce its operating costs with tens of millions of dollars.
Says Qantas CEO Alan Joyce: “Our aim is to position ourselves in the Southeast Asian marketplace in advance of planned aviation liberalisation. In five years we plan to have a hub in the world’s fastest growing aviation region, feeding traffic into both our Qantas and Jetstar networks. This is how we will end the disadvantage of being an end-of-the-line carrier.”
Read full article »
Qatar Airways expands via niche markets, opening 24 new routes in 2 years time
11 December 2011 | With an enviable outlook ahead of them, Emirates, Etihad Airways and Qatar Airways are some of the world’s fastest-growing airlines. A recent report released by the Boston Consulting Group illustrates that the three carriers will collectively triple their capacity over the next 20 years. But while these so-called ‘Gulf Gullivers’ have a number of similarities – they have placed multi billion-dollar aircraft orders, large investments in their premium services, and expanded their airports in order to turn the Gulf region into the world’s 24/7 aviation hub – they have taken on different growth strategies.
We have highlighted before how Emirates, which will become the world’s largest operator of widebody aircraft by 2015, is combining its global Dubai hub with localized services on board. This time we are taking a look at Qatar Airways, who has been taken a slightly different expansion approach by seeking out markets that have yet been unexplored by fellow Gulf carriers.
Airline of the year
The national carrier of Qatar has experienced a rapid ascent to become one of the top airline brands in the sky. Earlier this year, 5-star rated Qatar Airways was named “Airline of the Year 2011” by Skytrax – which cited its roomy economy class cabin and the Business and First Class experience (including the Premium Terminal at its Doha hub) as key drivers for the ranking.
Qatar Airways currently operates a fleet of 102 aircraft to 109 destinations, and by 2013 plans to serve 120 destinations with a fleet of 120 aircraft. Receiving a new aircraft every 18 days, the airline is targetting an annual growth of 35 percent in the coming years, and has ordered more than 200 aircraft, including 10 a380s and 80 a350s, worth over USD 40 billion. Additionally, Qatar Airways is a key stakeholder in the construction of Doha’s brand new international airport, scheduled to open in 2012.
Niche Markets
While Qatar Airways is likely to remain smaller in total size than its near neighbour Emirates for the foreseeable future, the Doha-based carrier seems keen to overtake its Dubai-based rival in the number of destinations served (109 versus 116 routes at the moment). Speaking at the recent Dubai Air Show, Qatar Airways CEO Akbar Al Baker said that the airline’s mission “…has been to operate to key business and leisure destinations around the world, but also to underserved markets where others dare not venture into. We take bold decisions to serve certain markets because we believe it makes strong business sense.”
Read full article »
‘No-frills chic’ carrier IndiGo becomes India’s second largest domestic airline in just five years
See our Facebook page for more images
4 November 2011 | There’s no doubt that the low-cost carrier business model has boomed in the past decade. Focusing on innovation and enhanced experiences on top of the traditional low-cost model, ‘no frills chic’ airlines such as Jetblue and Virgin America have created a loyal following. In recent years, this concept has been spreading around the globe, albeit slowly, with start-up carriers such as Virgin Australia, Azul from Brazil and Japan’s Starflyer focusing on the passenger experience in order to differentiate themselves from established players.
IndiGo
In India, a very competitive market that is growing at the world’s second fastest rates, IndiGo has become the second largest domestic carrier by securing nearly 19 percent of the local market in just five years. According to IndiGo President Aditya Ghosh, the airline’s philosophy is “to make travel as hassle-free as possible — low-cost but high quality — and that’s why we are popular both with budget travellers and high-level corporations”.
Since its launch in 2006, IndiGo has been the fastest growing low-cost carrier in the world, while posting profits over the last three years. In the 12 months ending March 2011, the airline achieved a 25 percent profit margin on its operations, generating a profit of USD132 million. Traffic in the 2010-11 fiscal year grew with 39 percent, with average load factors above 80 percent. IndiGo ordered no less than 100 A320 aircraft when it started operations and in 2011 pushed for an additional 150 A320neos (for delivery between 2016 and 2025), as well as 30 more A320s, which besides for domestic growth are intended for international expansion.
Branding the passenger experience
IndiGo’s media campaign has focused more on customer service and less on pricing where it is hard to be competitive, and the airline’s avant-garde branding has been a major differentiator. Collaborating with branding agency Wieden + Kennedy, IndiGo has come out with campaigns focused around the no-frills chic concept. Cheeky print ads promoted IndiGo’s same-day return flights from major Indian cities, extra seat pitch (2 inches more than India’s industry standard) and new aircraft. IndiGo’s check-in counters feature banners saying “India’s Coolest Airline” and check-in queues have “Cut The Red Tape” signs. Read full article »
Virgin America goes ‘hybrid’, adds wireless IFE into its RED entertainment system
25 September 2011 | Besides the growing number of airlines that are rolling out (or about to roll out) broadband Internet on their aircraft (e.g, Lufthansa, Turkish Airlines, SAS, Norwegian, Virgin Atlantic), these days the buzz in in-flight entertainment is all about bringing media tablets such as the iPad into the cabin (e.g, Jetstar) and/or installing wireless IFE systems (e.g, American Airlines and Gol).
Further upping the ante, Virgin America – probably the most tech-embracing airline in the world – has announced it will roll out what it calls a “hybrid IFE&C platform.” Besides offering entertainment via embedded, seat-centric screens, the airline will also offer passengers wi-fi connectivity through their seatback system and their own personal devices, as well as offer wireless access to content stored on an onboard server.
Multitasking
Virgin America has selected Lufthansa Systems’ new BoardConnect platform for the next iteration of its Red in-flight entertainment and communications (IFE&C) platform. The new Red system, slated for a late 2012 release, includes larger, high-definition touchscreen seatback monitors, full wi-fi connectivity and four times more entertainment content. It will also allow passengers to connect their own electronic devices to the system pre-flight, in-flight and post-flight. “For example, if a passenger did not finish watching a film or TV show in-flight, they could save and download to their iPod and finish at their hotel,” said Abby Lunardini, VP of corporate communications for Virgin America.
Virgin America’s CEO David Cush said the system will allow the airline to offer passengers “the best of both worlds.” “Just offering a larger wi-fi pipe with no seatback entertainment as some of our competitors are doing is limiting given wi-fi bandwidth,” Cush said. “We want to give our travelers more options instead of fewer, including the ability to multitask across platforms – just as they do in their lives on the ground.” […] “Our focus on innovation is a core part of our business model and guest offering, and BoardConnect will allow us to […] pace the larger consumer trends in mobile technology.” Adds Virgin America’s Lunardini “This is a significant investment for us. “We want to stay ahead of the path … a lot of people fly with us because it. We’re an entertainment-driven brand.”
Read full article »
Azul takes Jetblue’s ‘no-frills chic’ approach to gain a foothold in Brazil
3 September 2011 | Air travel in Brazil is booming as a result of the rapid expansion of the middle class in the country, about 100 million strong. According to a recently released IATA study, the Brazilian domestic aviation market has grown 19 percent in terms of revenues in the first six months of 2011, the world’s fastest growth. As a comparison, the domestic market in China and India expanded with nearly 8 percent, while the U.S. recorded a 2.5 percent growth.
Azul Linhas Aéreas
Started by Jetblue founder and former CEO David Neeleman, Azul (Blue in Portuguese) in December 2008 entered the market as a Latin version of the New York-based airline. Just like Jetblue, Azul operates a ‘No-Frills Chic’ concept – where the low cost idea meets a dash of innovation – in order to differentiate itself in a market dominated by TAM and GOL.
The airline was named Azul after a crowdsourced naming contest, which created an instant buzz around the airline. In its first year of operation, Azul also offered an ‘all-you-can-jet’ promotion when launching new routes. The PassaporteAzul allowed purchasers to travel on as many Azul flights as they wanted for a one-month period for R$499 (USD306, EUR215). According to Azul, 80 percent of the purchasers on those passes had never flown on the airline before. As a result, Azul boarded more than 2 million customers in 2009, its first year of operation, the first airline in the world to achieve this. Azul was recently also named Brazil’s most innovative company by Fast Company magazine.
Ônibus Azul
Azul has, by choice, avoided the major airline hubs and connection centers in São Paulo and Rio de Janeiro, choosing to focus on cities less well served by established airlines. For example, its main hub is Campinas Airport, which is located an hour’s drive from São Paulo. To make it attractive for consumers to travel via Campinas, Azul provides free bus transportation for thousands of its passengers daily from Brazil’s business capital as well as from several other cities it serves. The airport transfer buses offer live satellite TV and free Wi-Fi onboard.
Read full article »
Asia’s full-service airlines go low-cost
31 May 2011 | The market share (in terms of seats) of low-cost carriers within Asia is expected to reach nearly 20 percent by the end of 2011. However, LCC penetration in the region is still behind that of the USA and Europe, while the middle class across Asia is growing rapidly, creating new demand for affordable air travel. Furthermore, the upcoming ‘open skies’ policy amongst the ASEAN countries, as well as increasing liberalization in Japan and South Korea will further boost air travel in the region.
These new market opportunities, plus strong competition from the likes of AirAsia, Cebu Pacific, Lion Air, IndiGo, Spring and Skymark, has led several full-service airlines in the region, such as Qantas (Jetstar), Singapore Airlines (Tiger), Malaysian Airlines (Firefly) and Korean Air (JinAir) to set up their own low-cost subsidiaries in recent years. Joining these airlines in the next year will be Thai Airways and All Nippon Airways, while Singapore Airlines just announced plans to establish a long-haul low-cost subsidiary.
Singapore Airlines: Long-haul low-cost
Singapore Airlines (SIA) new budget airline will start operating within a year and be based in Singapore. Although fully owned by Singapore Airlines and likely to operate some of SIA’s older model B777s, the new carrier will operate independently. Initial routes of the long-haul budget airline are expected to be to East Asia (China, Japan, South Korea), Australia and India. Other details, such as its name and just how ‘no frills’ the low-cost subsidiary will be, have not yet be announced.
According to analysts, SIA has little choice but to start a low-cost long-haul subsidiary because its mainline operation is not growing. In 2010, the airline carried 16.6 million passengers, compared with 19 million in 2007/8. In the same period, Singapore’s Changi Airport saw its passenger traffic growing from 36 million to 44 million. Given the more open air regulations in Singapore vis-à-vis other Asian locations, SIA faces more competitive pressures than some of its peers. For examaple, according to Nomura Investments, LCCs have a market share of 27 percent in Singapore compared with ess than 5 percent in Hong Kong.
With its new long-haul low-cost subsidiary, Singapore Airlines is aiming at Qantas’ Jetstar Asia and Malaysia’s AirAsia X as well as Gulf carriers such as Emirates, which have picked up the bulk of new long-haul traffic from Singapore.
Read full article »
Virgin Blue rebrands as ‘no-frills chic’ Virgin Australia
More images at Australian Business Traveller
5 May 2011 | We have reported before on the plans by Australian hybrid low-cost airline Virgin Blue to reposition itself as a more direct competitor to Qantas and double its share of Australia’s corporate travel market from 10 to 20 percent. Virgin Blue has just officially unveiled its new name – Virgin Australia – and new livery. The rebranding completes 10-year old Virgin Blue’s revamp into a ‘no-frills chic’ airline. Says Virgin Australia CEO John Borghetti, “We will still offer low airfares, keeping the competition in the sky high.”
Virgin Australia
Virgin Blue and its associate airlines—V Australia and Pacific Blue—will be rebranded Virgin Australia after the Virgin Group reached an agreement with Singapore Airlines (SIA) regarding the use of the Virgin name on international services to/from Australia. As part of its acquisition of a 49 percent steke in Virgin Atlantic back in 2000, SIA was given a veto on the use of the Virgin brand in the Asia-Pacific region outside of Australia, forcing Virgin Blue to brand its international operations Pacific Blue for regional services and V Australia for long-haul operations. Virgin Australia (tagline “Now You Are Flying”) will replace the domestic Virgin Blue brand immediately and international brands V Australia and Pacific Blue by the end of 2011.
B737-800 Sky Interior
Virgin Austalia also showcased the widebody and narrow-body versions of its new product on an Airbus A330 and Boeing 737. The new makeover, both exterior and interior, is styled after the carrier’s U.S. sister airline Virgin America.
Virgin Austalia ‘s newest 737-800 comes in Boeing’s new Sky Interior, which features mood lighting, larger overhead lockers and sculpted sidewalls designed to provide a feeling of spaciousness. Virgin Australia’s 737-800 also debuts a new business class cabin with eight leather seats with a 37-inch seat pitch. A purple plexiglass dividing panel, also found on Virgin America’s jets, separates the business and economy sections and the LED lighting will be purple and white. The new Boeing 737-800 interiors will be rolled out across the majority of Virgin Australia’s current domestic fleet by the end of the year. Virgin Australia also said it will announce an innovative entertainment option shortly, which suggests it may be looking at iPads or similar devices.
Read full article »
Hybrid low-cost carrier airBaltic offers organic food, Nespresso and iPads in-flight
28 March 2011 | Earlier this year we published our ‘Innovative Airlines’ report (pdf here), which provides an overview of innovative products and services that passengers are experiencing on airlines around the world. An airline that also scores high on our list, is airBaltic, the hybrid low-cost airline of the Baltic states Latvia, Lithuania and Estonia.
Riga North Hub
Since 2008, airBaltic has made a transformation from a point-to-point low-cost carrier to a hybrid network LCC. The airline has turned its Riga ‘North Hub’ into a transit point for travellers from Nordic and Northwestern Europe to the growing markets of the former Soviet Union and the Middle East, as well as for Scandinavian passengers travelling to Southern and Western Europe. AirBaltic offers passengers connecting at Riga (65 percent of its customers) through ticketing and check-in, as well as 25-minute connection times. The airline has been growing its network fast, adding over 50 new routes since 2008 (for example to small cities in Finland) and currently serves 80 destinations from Riga, carrying over 3.2 million passengers in 2010 (an increase of 16 percent from 2009).
Despite its hybrid features, airBaltic’s Chief Commercial Officer Tero Taskila says the airline’s cost per average seat kilometer are on par with the likes of Easyjet and Norwegian and 30 to 40 percent lower than Finnair and SAS. Interestingly, airBaltic sees Turkish Airlines, which has also established an extensive network in Europec coupled with a low cost base, as one of its main emerging competitors.
Business Class: local, organic catering, Nespresso coffee
Besides its focus on transit traffic, other ‘hybrid’ features of airBaltic include a separate Business Class cabin, airport lounge and a frequent flyer program.
Reflecting the growing local food trends (see “Airlines go local and seasonal with their food offerings”), airBaltic has teamed up with Mārtiņš Rītiņš, a renowned Latvian ‘slow food’ chef, to serve dishes in Business Class that are based on organic, seasonal products provided by local Latvian farmers. The current menu for example includes free-range chicken breast, red deer steak and seasonal vegetables such as beetroot and pumpkin. Says CCO Taskila, “[Our passengers] can enjoy an excellent meal, while at the same time supporting local farmers who grow organic products. We also plan to increase the presence of locally-grown organic products in the economy class of airBaltic.” See this interview with Mārtiņš Rītiņš for more on the challenges of offering local, organic food up in the air.
Read full article »
Low-cost Virgin Blue transforms into a full-service airline
1 March 2011 | In a bid to become a more powerful, direct competitor to Qantas, Australia’s Virgin Blue is transforming itself from a cheerful low-cost carrier into a full-service business and leisure airline with a low cost base. With the remake, Virgin Blue wants to double its share of Australia’s corporate travel market from 10 to 20 percent and cut its reliance on leisure travel in the process, as competition from other low-cost airlines, such as Jetstar (part of Qantas) and Tiger (50% owned by Singapore Airlines), is driving down leisure fares. Virgin Blue’s earlier attempts to target the business market, with for example a premium economy class, has left the airline somewhat stuck in the middle.
Strategic repositioning
As part of what Virgin Blue has dubbed a ‘Game Change Program’, the airline has recently announced a series of initiatives that seriously upgrades its product. As Australian Business Traveller nicely summarizes it: “There’s a seismic shift happening at Virgin Blue. A new name, new logo and new brand. New planes with new livery. New business class seats, new cabins and new lounges. New routes. New alliances with partner airlines. New uniforms”. The catalyst for the changes at Virgin Blue has been the appointment in May 2010 of John Borghetti, formerly Qantas’ executive general manager.
Rebranding
First of all, Virgin Blue will reveil a new brand name by June 2011, which is expected to be either Virgin Australia or V Australia. The airline’s creative director Hans Hulsbosch recently told The Australian that while the Virgin brand would continue to anchor the airline, Blue would no longer be part of the brand. Research has found that as Virgin moved to capture the business-class market, its brand was being held back by perceptions among business travelers that it was purely a budget airline. Furthermore, Virgin Blue wants to consolidate its fragmented brands – Virgin Blue, Pacific Blue, Polynesian Blue and V Australia – which is the result of an agreement between Virgin Atlantic and Singapore Airlines (which owns 49 percent of Virgin Atlantic) that prevents the Virgin brand being used outside Australia.
New uniforms
Virgin Blue’s new uniforms perhaps best illustrates the airline’s transformation from a cheerful low-cost airline into a full-service carrier targetting business travellers. Created by Project Runway Australia winner Juli Grbac, the new red, silver and purple unifoms are remarkably reminiscent of Virgin Atlantic’s chic and classy style, and replace Virgin Blue’s current more casual outfit.
Read full article »
Japanese low-cost carrier Skymark to operate A380 with just 394 seats
17 November 2010 | Japanese low-cost airline Skymark Airlines has signed a memorandum of understanding with Airbus for the purchase of four A380s and the option for two more. The official agreement will be signed in spring 2011 and Skymark has also indicated it may order a total of 15 A380s. The airline plans to introduce six A380s between 2014 and 2017, and add nine more after 2018. Skymark is the first low-cost carrier in the world, and the first airline in Japan, to order the superjumbo.
394 seats, business and premium economy class only
Skymark’s President Shinichi Nishikubo, who owns 49 percent of the airline, also told media that the airline will fit the A380 with just 394 seats in a two-class configuration – the least-dense configuration announced for the A380 by far. Skymark’s A380s will be fitted with 114 business-class seats on the upper deck and 280 premium economy seats below. No economy class will be offered. Business Class will be equipped with angled lie-flat seats at 60″ pitch and 20.7″ width, while ‘shell-style’ seats at 38″ pitch and 20.5″ width will be offered in Premium Economy. With 450 seats, Qantas is currently operating the A380 with the lowest seat-density, but the A380 typically seats 525 and is certified to carry up to 853 people. See here for an overview of A380 seating configurations currently in operation. Read full article »
Low-cost carrier Virgin Blue transforms itself into a full-service airline, with lower costs
3 September 2010 | In a bid to become a more potent, direct competitor to Qantas, Australia’s Virgin Blue is planning to transform from a cheap and cheerful low-cost carrier to a serious business and leisure airline that has low costs. With the remake Virgin Blue wants to double its share of Australia’s domestic corporate travel market from 10 percent, cut its reliance on leisure travel in the process and limit investments in its network by creating international alliances. The carrier is targeting business flyers as competition from low-cost airlines Jetstar (part of Qantas) and Tiger (50% owned by Singapore Airlines) is driving down leisure fares. The catalyst for the changes at Virgin Blue has been the appointment in May 2010 of John Borghetti, formerly Qantas’ executive general manager.
Consolidating brands
The Virgin Blue Group has a number of substantial issues to resolve. The first one is consolidating its four disparate brands: Domestic carrier Virgin Blue, short-haul international airlines Pacific Blue and Polynesian Blue and long-haul carrier V Australia. Virgin just hired Hans Hulsbosch, who designed the Qantas flying Kangaroo logo, as creative director for the airline. While it is unlikely the Virgin Blue brand will be abandoned, it is possible a number of the sub-brands such as V-Australia and Polynesian Blue will be scrapped. An agreement between Virgin Atlantic and its 49% stakeholder Singapore Airlines however prevents the Virgin name from being used outside Australia.
Business travelers
The second challenge is to position Virgin Blue for a head-to-head battle with Qantas for a significant stake in the Australian business passenger market. As of May 2011, Virgin Blue will introduce A330s on domestic trans-continental trunk routes such as Sydney to Melbourne, Brisbane and Perth. The A330s will have a separate business class cabin (details have yet to be announced), which may also bring a bit of V Australia’s ‘boutique experience’ to Virgin Blue. To compete with Qantas’ Business class cabin, Virgin Blue launched Premium Economy seating in 2007. It was not successful, however, because there was no clear distinction with the rest of the cabin, and it left Virgin Blue somewhat stuck in the middle. Read full article »
Entrepreneurial airBaltic extends brand to taxi and bike sharing services
23 August 2010 | In the last years, Latvian national airline airBaltic has made a transformation from a point-to-point low-cost carrier to a hybrid network LCC. The airline has turned its Riga hub into a connecting point for travelers from Nordic and Northwestern Europe to the rapidly growing markets of the former Soviet Union and the Middle East. airBaltic offers transfer its passengers (60% of customers) at Riga through ticketing and check-in, as well as 25-minute connection times, and other hybrid LCC features include a 2-class cabin, airport lounge, and a frequent flyer program.
airBaltic has been growing its network fast, adding 15 new routes in 2008, 11 in 2009, and 27 routes this year (for example adding smaller cities in Finland). In 2009, the airline carried 2.75 million passengers and according to AEA data passenger numbers grew 19% in the first 5 months of 2010. Besides this aggressive hub strategy, the company behind airBaltic, Baltic Aviation Systems, seems to be turning into a Baltic version of the easyGroup (of easyJet and easyHotel fame), using the airBaltic brand (simple, reliable, affordable, visible) to enter other markets.
In April 2010, airBaltic established its own taxi company, BalticTAXI, in order to improve the quality of the taxi business in the capital. Taxi drivers in Riga often charge too much for rides, which is damaging the image of Riga and Latvia. Citing a lack of government interest to improve the situation, airBaltic believed there was room for a new transparent entrant. BalticTAXI’s fleet of 120 Toyota Corolla Verso vehicles is staffed by professional uniformed drivers, and for example there is a fixed price for the journey from the airport to any location in Riga.
Read full article »
New long-haul low-cost airlines prepare for take-off in Scandinavia
9 August 2010 | So far, the only region where the low-cost, long-haul business model has truly taken off has been the Asia-Pacific. In Europe, airberlin is currently the sole low-cost carrier to have established a long-haul operation, operating 13 A330s (it also ordered 15 B787s). The airline uses its extensive domestic network to feed its long-haul flights from Dusseldorf to New York, LA, San Francisco, Vancouver, Dubai, Beijing, and holiday destinations in the Caribbean, Africa and Thailand. Airberlin also just entered the Oneworld alliance and, amongst others, will codeshare with American Airlines to feed/connect its passengers in the USA. Ryanair has been hinting to start trans-atlantic routes with a separate company (rumoured to be named Ryanair Atlantic), but has shelved these plans until 2015.
Now, two airlines in Scandinavia aim to take advantage of the Nordic region’s geographic location between North America and Asia (as Finnair successfully does with its ‘Via Helsinki’ hub). Norwegian, the fourth-largest low-cost carrier in Europe has plans to established up to 20 long-haul routes from Scandinavia to Asia and the USA, capitalizing on its large regional network. The airline plans to start operations in 2011, in time for summer season, and eventually may order up to 15 widebodies, possibly B787’s. Norwegian has listed New York and Bangkok as initial destinations and has also mentioned Miami, the American west coast, New Delhi and Beijing. Flights will mainly be from its Oslo-hub, but also from Copenhagen and Stockholm. Norwegian plans to operate a 2-class configuration, with prices from Euro 200/400 return in Economy/Business to New York.
Read full article »
Thai Airways and ANA to set up low-cost airlines with partners
4 August 2010 | Thai Airways and Singapore-based Tiger Airways have joined forces to launch a new low-fare airline, called Thai Tiger Airways, in the first quarter of 2011. Thai Tiger will offer short-haul services out of Bangkok’s Suvarnabhumi International Airport and planned destinations include Chiang Mai, Phuket, Penang, Kuala Lumpur, Macau, Shenzhen and Chennai. THAI will have a 51% share in the new carrier.
ASEAN
Budget airlines are expanding rapidly throughout Asia and in 2009 accounted for 15.7 percent of total capacity (compared with just 1 percent in 2001), according to the Center for Asia Pacific Aviation. THAI has seen its market share on domestic routes drop from 80% to 50 % and its regional market share from 42% to 30 % over the last few years. Using the low-cost expertise of Tiger Airways will allow THAI to become more competitive in the fast-growing intra-Asian travel market, and prepare itself for the upcoming liberalization of the ASEAN skies in 2015. THAI already has a 39% stake in domestic low-cost airline Nok Air.
Read full article »
Asia-Pacific long-haul low-cost airlines getting ready for further expansion
24 June 2010 | Asia’s fragmented geography makes air travel an attractive option. Especially low-cost airlines have allowed many Asians to travel by plane for the first time, and there is major scope for LCC growth on medium and long-haul routes as the rapidly growing middle classes of Asia are increasingly traveling longer distances. Market liberalisation is the other growth engine, with the opening of new routes between secondary destinations, especially in China, India and Southeast Asia.
Low-cost carriers already fly many 5-hour routes across Asia, such as Jin Air and Jeju Air from Seoul to Bangkok, and Tiger Airways from Singapore to destinations in Greater China. Indonesian low-cost carrier Lion Air also has plans to expand its regional network to China, Japan and South Korea. According to Airbus in 2009 Asian budget carriers flew an average 1,800 kilometres per flight. In comparison, the average flight length for Southwest Airlines (USA) was 1,019 km, and 978 km for Easyjet (Europe). The Asia-Pacific region is also home to 2 of the 3 long-haul low-cost airlines in the world, AirAsia X and Jetstar (airberlin is the third one). Read full article »
