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Low-cost Carriers in Asia - February 2017

“While China offers the greatest potential for LCC development in Asia, protectionism and regulatory constraints remain a major impediment for LCCs that operate in the market.”

This report looks at the following areas:

  • Which are the leading LCCs in the region?
  • What is the market share of LCCs in the major Asian aviation markets (China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines and Singapore?)
  • How are regulatory and economic developments impacting LCCs in Asia?
  • What is the trend regarding LCC air routes in the region?
  • What are the growth prospects for LCCs in Asia?

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Table of contents

  1. Introduction

    • Data Sources

      • Overview

        • Expenditure on travel and tourism
          • Figure 1: Spending1 on travel & tourism worldwide & in Asia Pacific & by sub-region (US$bn), 2015 & 2026
        • Tourist arrivals
          • Figure 2: Tourist arrivals* in selected Asia-Pacific countries (m), 2012-20
        • Trend in air traffic
          • Figure 3: Passenger airlines: passenger volume, by selected Asian country (m), 2012-20
      • The LCC Business Model

        • Alliances

            • U-FLY Alliance
              • Fleet
                • Figure 4: U-FLY Alliance member details, January 2016
              • Eastar Jet joins U-Fly
                • Figure 5: Fare promotion over the period 27-31 July 2016
              • Value Alliance
                • Helping small carriers to compete against the market leaders
                  • Value Alliance market share
                    • Figure 6: South East Asia capacity share (% of seats) by airline group/alliance, May 2016
                    • Figure 7: Value Alliance fleet size compared to the large Asian LCCs as of 18 May 2016
                  • Growth through interlining and transfers
                  • North East Asia

                      • Figure 8: LCC share of available seats within select North East & South East Asian domestic markets, 5-11 June 2016
                    • LCC penetration varies by country and route
                      • Figure 9: LCC share of available seats in the 20 largest international North East & South East Asian markets, 5-11June 2016
                    • Fast-growing China-Japan route
                      • Taiwan-Japan and Hong Kong-Japan
                        • Figure 10: Japan-Taiwan seat capacity by airline type on 10 largest routes, plus total Tokyo-Taipei market (left axis) & LCC penetration rate (right axis): 11-17 July 2016
                        • Figure 11: Hong Kong-Japan LCC & FSC capacity & LCC share by city, 1-7 August 2016
                      • Faster growth in North East Asia
                        • Figure 12: Annual seat capacity of the three largest routes (in 2016) in North East & South East Asia, 2006-16
                      • China
                        • Figure 13: China – passenger airlines, market segmentation by volume (m passengers), 2007-15
                      • 9 Air
                        • China United Airlines
                          • Fleet
                            • Figure 14: China United Airlines’ fleet, 2016
                          • Lucky Air
                            • Fleet
                              • Figure 15: Lucky Air’s fleet, November 2016
                            • Ruili Airlines
                              • Spring Airlines
                                • Urumqi Air
                                  • Hong Kong
                                    • HK Express
                                      • Figure 16: HK Express’ performance data, October 2016 &12 months to 31/10/2016
                                    • Japan
                                      • Figure 17: Japan – passenger airlines, market segmentation by volume (m passengers), 2007-13*
                                    • A comeback for AirAsia Japan
                                      • Jetstar Japan
                                        • Peach
                                          • Spring Japan
                                            • Vanilla
                                              • South Korea
                                                • Figure 18: South Korea – passenger airlines, market segmentation by volume (m passengers), 2010-15
                                              • Air Busan
                                                • Fleet
                                                  • Figure 19: Air Busan’s fleet, 2016
                                                • Jeju Air
                                                  • T’way
                                                  • South Asia

                                                      • India
                                                        • Figure 20: India – passenger airlines, market segmentation by volume (m passengers), 2009-15
                                                      • IndiGo leads the pack
                                                        • Figure 21: Domestic market share of Indian airlines, % share of domestic passengers, 01/2009-06/2016
                                                      • Fleet
                                                        • Figure 22: IndiGo’s fleet, 2016
                                                      • SpiceJet is second-ranked
                                                        • Delhi is biggest base with most routes
                                                          • Figure 23: SpiceJet's top 15 airports by weekly departing seats, summer 2016
                                                        • Fleet
                                                          • Figure 24: SpiceJet's fleet, 2016
                                                        • GoAir
                                                          • Figure 25: GoAir’s annual ASKs & year-on-year growth, 2006-16
                                                        • GoAir’s airport network
                                                          • Figure 26: GoAir's top 12 airports, ranked by weekly departing seats, May 2016
                                                        • Fleet
                                                          • Figure 27: GoAir’s fleet, 2016
                                                        • Air India Express
                                                          • AirAsia India
                                                            • Figure 28: Destinations served by AirAsia India, 2016
                                                          • Pakistan
                                                            • Airblue
                                                            • South East Asia

                                                                • Fleet growth slowing down
                                                                  • Figure 29: South East Asia LCC fleet by airline, 2013-mid-2016
                                                                • Capacity growth slows as LCC penetration rate declines
                                                                  • Figure 30: South East Asia LCC penetration rate (% of seats), 2007 to end May 2016*
                                                                  • Figure 31: South East Asia LCC group fleet size & order book, as of May 2016
                                                                • Profitability a concern
                                                                  • Figure 32: South East Asian airline sector operating profit/loss (US$m), 2015 vs 2014
                                                                • Cross-border joint ventures
                                                                  • Indonesia
                                                                    • Figure 33: Indonesia – passenger airlines, market segmentation by volume (m), 2007-15
                                                                  • Citilink
                                                                    • Figure 34: Trend in Citilink passenger numbers, 2010-15
                                                                    • Figure 35: Citilink's aircraft fleet, 2016
                                                                  • Lion Air
                                                                    • Figure 36: Lion Air's fleet, 2016
                                                                  • Indonesia AirAsia
                                                                    • Indonesia AirAsia X
                                                                      • Malaysia
                                                                        • AirAsia
                                                                          • Growth continued in 2016
                                                                            • Figure 37: 3rd Quarter (July-September) operating statistics for AirAsia Group (8), 2016
                                                                            • Figure 38: Market share* of AirAsia Malaysia & its partially owned subsidiaries in Thailand, Indonesia, Philippines & India, 2015
                                                                          • Fleet
                                                                            • Figure 39: Total AirAsia fleet, 2016
                                                                          • AirAsia X
                                                                            • Fleet
                                                                              • Figure 40: Malaysia AirAsia X fleet, 2016
                                                                            • Restructuring
                                                                              • Philippines
                                                                                • Cebgo
                                                                                  • Cebu Pacific
                                                                                    • Fleet
                                                                                      • Singapore
                                                                                        • Jetstar Asia Airways
                                                                                          • Scoot
                                                                                            • Fleet
                                                                                              • Figure 41: Scoot Airlines’ fleet, 2016
                                                                                            • Tigerair
                                                                                              • Fleet
                                                                                                • Figure 42: Tigerair’s fleet, 2016
                                                                                              • Thailand
                                                                                                • Figure 43: Annual passenger movements (m) at Thailand’s main airports, 2003-16
                                                                                              • Thai AirAsia now bigger than Thai Airways
                                                                                                • Figure 44: Top 15 airlines operating at Thai airports, ranked by share of total, summer 2016
                                                                                              • China is leading country market and growing fast
                                                                                                • Nok Air
                                                                                                  • Fleet
                                                                                                    • Figure 45: Nok Air's fleet, 2016
                                                                                                  • NokScoot
                                                                                                    • Thai AirAsia
                                                                                                      • Thai AirAsia X
                                                                                                        • Thai Lion Air
                                                                                                          • Thai Vietjet Air
                                                                                                            • Vietnam
                                                                                                              • Figure 46: Vietnam – passenger airlines, market segmentation by volume (m), 2010-15
                                                                                                            • Jetstar Pacific Airlines
                                                                                                              • VietJet Aviation
                                                                                                                • Fleet
                                                                                                                  • Figure 47: VietJet's fleet, December 2016
                                                                                                              • What Next?

                                                                                                                  • Boeing predicts ongoing strong growth
                                                                                                                    • Will LCCs finally take off in China?
                                                                                                                      • Ongoing deregulation in ASEAN favours LCCS
                                                                                                                        • Foreign ownership restriction could be lifted soon…
                                                                                                                          • Long-haul LCC flights

                                                                                                                          Low-cost Carriers in Asia - February 2017

                                                                                                                          US $391.67 (Excl.Tax)