Development of low cost airlines in the Asia Pacific region

by Chan, Lai-shan

(Uncorrected OCR) Abstract of thesis entitled ?evelopment of Low Cost Airlines in the Asia Pacific Region?Submitted by Chan Lai Shan for the degree of Master of Arts in Transport Policy and Planning at The University of Hong Kong in June 2004 Deregulation of the air market in Europe and United States has led to free competition and allow the entry of low cost airlines. Easy Jet & Southwest Airlines are typical recent successful low cost carriers. The financial performance of Asia Pacific airlines after the Asian financial crisis of 1997 are poor. However, no frills and low cost airline operations are becoming prosperous in the region. Many industry observers question whether the phenomenal success of low cost flying models in Europe and the U.S. can repeat in Asia, because the air market in Asia has not been de-regulated which restricts free cross-border operations between a multitude of nations. However, Air Asia in Malaysia and Virgin Blue in Australia have been entrenched and are now fast growing. Both are set to expand onto international routes. Some of the mature airlines in Asia have also launched their low-cost subsidiaries, for example, Japan Airlines, Garuda Indonesia, Qantas Airways and Air New Zealand. A wave of entry of low cost airlines is evident in Asia? skies. Singapore Airlines and Thai Airways International are planning to operate their low cost subsidiaries later this year. The low cost model has arrived in the air market in Asia. The purpose of the dissertation is to present the current aviation environment as well as the potential development of low cost airlines in the Asia Pacific region. It will also investigate the low cost model in Europe and the U.S. and see whether it can be cloned in Asia, especially in Hong Kong.