Low-Cost Asian Airlines Still Thrive, on Silver Linings Aviation

Tony Davis, the chief executive of Tiger Airways, based in Singapore, readily admits that he is much happier running an Asian- based low-cost airline right now than he would be running one in Europe or the United States.
For one thing, the significant strengthening of Asian currencies against the dollar in recent months has helped mitigate some of the effects of the ever-rising price of oil, traded in dollars, while historically low interest rates have made paying for new aircraft less expensive.
"There are some benefits to being outside of a U.S.-denominated revenue area, and we're certainly taking advantage of those," Davis said in a recent interview.
But maybe most important, there is still very high demand for air travel in the region and no easy alternative in a region that mostly lacks sophisticated railroad systems or road infrastructure. "It would take days for someone to drive from Singapore to Cambodia," Davis noted.
Asian national carriers have not been immune to the sharp rise in the price of oil and the global economic slowdown, and several have had to pare down capacity on some routes. China Airlines, the largest carrier in Taiwan, has canceled about 10 percent of flights, mostly to the United States and Asia, and Thai Airways has canceled its nonstop services to New York and reduced its frequency to Los Angeles. Asiana Airlines, based in Seoul, and Qantas, in Australia, have also cut several routes or reduced capacity.
Still, the gloom that has descended on much of the world's aviation industry is far from affecting everybody, and some Asian low-cost airlines are drawing up expansion plans, looking at opportunities where others see losses.
The Malaysian airline AirAsia, the biggest low-cost carrier in Southeast Asia, measured by fleet size, is also pressing ahead with an ambitious route expansion program. It recently introduced four new destinations - Kuantan in Malaysia, Haikou in China, Makassar in Indonesia and Hong Kong - and its chief executive, Tony Fernandes, says it will fly to southern India by the end of this year.
14/07/08 Sonia Kolesnikov-Jessop/RedOrbit

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Categories: Foreign Jul 2008, Indian Aviation- In General Jul 2008