Low-cost airlines are leading a growth spurt in Asia Pacific’s aviation industry, according to the latest research from PhoCusWright.
In a report due to be published next week, the travel research firm outlines how the region’s airline market is the fastest growing in the world, with low-cost carriers (LCCs) growing nearly three times faster than traditional airlines this year.
The growth, it says, comes despite a background of political and economic instability, natural calamities, rising oil prices and foreign exchange volatility.
"Airline gross bookings marked double-digit gains across all Asia Pacific markets except Japan last year," it says.
"The best performance was from the region’s LCCs, whose passenger revenues jumped 42% in 2010 and another 27% in 2011."
In 2012, PhoCusWright projects LCCs will grow 23% versus just 8% for traditional airlines.
"While traditional airlines still account for the vast majority of passenger revenue in the region, LCC outperformance over the past several years underscores the impact newer, more nimble carriers are having in the region, especially in the faster growing markets of India and Southeast Asia," said Douglas Quinby, senior director, research.
"LCCs are weathering industry challenges better than their full-service counterparts, and their continued growth and expansion – abetted by the faster growing APAC economies – are yielding profit margins ahead of network carriers on average."’¨
The report predicts that by 2013, LCC online gross bookings will reach US$13.3 billion, up 55% over 2011.
The PhoCusWright’s Asia Pacific Online Travel Overview Fifth Edition Airlines: A Turbulent Ascent will be published on July 24.
