Home' Asian Aviation : AAV Feb 2015 Contents 30 AsianAviation | FEBRUARY 2015
he shifting fortunes in the Asia-Pacific
low-cost sector are amply demonstrated
by comparing this year’s ranking by seats
offered in December 2014 with the
previous years table (both supplied by aviation
intelligence, schedules and data supplier OAG).
Then there were four groups aspiring for pan-Asian
status. Now there are three.
The one to drop out is Singapore’s Tigerair, a victim
of the cutthroat competition driven by overcapacity
in many Asia-Pacific markets, especially those in
South-East Asia. Tigerair bailed out of its affiliates
in Australia, Indonesia and the Philippines last year.
We’ve included Tigerair’s Taiwanese joint venture
start-up with China Airlines (Tigerair Taiwan) — but
it only holds a 10% stake in that. The total number
of seats offered by Tigerair has more than halved
since the corresponding period last year.
Tigerair’s Taiwanese joint venture means it is still,
for the purposes of this table, counted as a group.
It has gone for a “virtual growth” strategy, where it
contributes its brand to partnerships, rather than
significant capital or metal.
One of the other groupings is actually an accidental
outcome of the Tigerair demise. Cebu Pacific took
over the latter’s Philippine operation and is still
running it under a separate AOC — for now.
The other new group is Spring Airlines, which
launched its Japanese venture last year. This
took it over the one million seats offered mark for
Of the big three groups, AirAsia and Lion Group
both saw growth rates fall sharply. AirAsia saw
group growth dip below 10%, compared with an
annual rate of 24% in December 2013. Lion Group
saw growth of 12.1%, down from nearly 21%.
AirAsia has been deferring new orders, while Lion
Group agreed its first leases of its massive order
book last year.
Jetstar Group, the other entity with Pan-Asian
ambitions, saw growth similar to the previous
year of around 11%. This was largely down to
its Japanese and Vietnamese operations. Jetstar
Asia’s single digit growth was mainly down to its
inclusion of Valuair in autumn last year — the latter
was previously run as a separate AOC for Jetstar’s
Indonesian operations. Jetstar Airways saw no
growth as parent Qantas reined back capacity in
the Australian market, with positive financial results.
Elsewhere, the seemingly endless turmoil in the
Indian market was evident in the divergent fortunes
of IndiGo Air and SpiceJet. The former saw growth
of 23%, the latter saw a decline of 24%. SpiceJet
had a torrid December, which saw its fleet grounded
at one point as it struggled to pay its fuel bills.
Whether they will be around this time next year,
only time will tell. IndiGo, on the other hand, is the
only Indian carrier to be making money (Go Air is
just about breaking even). And IndiGo stamped its
mark on the market with an order for 250 Airbus
A320neo aircraft last year.
A striking feature of the table is the number of
LCCs that are owned by mainline carriers. If you tried
to come up with a table that factored in this, it would
be very messy indeed.
For instance, Scoot is a fully owned subsidiary
of Singapore Airlines, which also has a majority
(55.8%) stake in Tiger Airways following the recent
rights issue. The two LCCs have anti-trust immunity
in Singapore. Meanwhile, Scoot is setting up a joint
venture with Thailand’s Nok Air called NokScoot,
and Nok Air has Thai Airways as a significant
There are other similar examples. Jetstar Japan is
a joint venture between Qantas-owned Jetstar and
JAL. Jetstar Pacific Airlines is a joint venture between
Jetstar and Vietnam Airlines. The latter also has a
49% stake in Cambodia Angkor Air. Vanilla Air is
owned by ANA, which also has a significant stake in
fellow Japanese LCC Peach Aviation.
Around a third of LCCs in the Asia-Pacific region
are either part-or-fully owned by mainline carriers.
One of these is Citilink Indonesia, owned by
Garuda. This saw 60% growth in seats offered as it
took over a chunk of domestic routes from Garuda.
This was a response to fierce competition from
Lion Group, and outgoing Garuda CEO Emirsyah
Satar said last year that he could envisage Citilink
operating all the group’s domestic services at some
point in the future.
Another airline rising up the table is VietJet Air,
which grew by 52.4% in terms of offered seats.
The Vietnamese LCC will become another group
next year with the launch of scheduled services by
Thai VietJet, which is already doing charter flights.
It is also looking at a joint venture somewhere in
north Asia, possibly Japan, South Korea or (further
Another LCC with significant growth was
HK Express, the only Hong Kong-based LCC.
Relaunched as an LCC in 2013, HK Express is still
in ramp-up mode.
Another striking feature of the table is the low
profile played by the region’s biggest single market
by some margin — China. The country’s LCC sector
The Asia-Pacific LCC landscape is ever-changing as various players struggle with over-
capacity in certain regions, writes Colin Baker
A striking feature of the table is the
number of LCCs that are owned by
mainline carriers. If you tried to come
up with a table that factored in this, it
would be very messy indeed.
Links Archive AAV Dec14 Jan15 AAV March 2015 Navigation Previous Page Next Page