Get ready for the big bang
Both Geoff Dixon and Chris Corrigan now that their both cashed up should both be looking
at getting amongst this SE Asian action instead of concentrating
on NZ with only 4 million population, if they don't you can bet the Americans
and Europeans will.
The opportunities to start an Asian based LCC has never been
better, my first choice would be Subic Bay where Federal Express
has operated safely for many years now, I'm sure if Geoff or Chris
approached Congressman Dick Gordon whose wife is also the
the Mayor of Olongopo and Subic they might find themselves
with a possible deal.
In the article below I believe Peter Harbison is right on the money.
my 2 cents
Merry Christmas
Wirraway
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Fri "The Australian"
Tiger leads low-cost boom
By Steve Creedy
December 12, 2003
Get ready for the big bang.
The flurry of low-cost carrier launches in Asia may just be the tip of the iceberg with an explosion of new airlines still to come.
Analysts at the Centre for Asia Pacific Aviation (CAPA) believe the potential for Asian point-to-point operations has barely been tapped.
"There are approximately 240 cities in Asia with populations of over half a million, of which 130 have populations over a million," said CAPA managing director Peter Harbison.
"The opportunities for these point-to-point operations, if the regulatory structure will allow it, are just so mind-boggling that I don't even like to talk about it publicly."
Mr Harbison was commenting after Singapore Airlines announced plans to enter into a partnership to set up a low-cost carrier called Tiger Airlines and entrepreneur Richard Branson revealed he was talking to Asian partners about replicating his success with Virgin Blue.
Partners in the independently operated Tiger will include the David Bonderman-Bill Franke aviation partnership Indigo Partners and Irelandia Investments, the family investment vehicle of Ryanair founder Tony Ryan.
Analysts have already raised concerns that the new carrier, which will draw on the expertise of Ryanair, will cannibalise SIA's passengers, particularly those of its subsidiary Silkair.
Similar concerns have been raised about the Qantas move to establish its low-cost domestic carrier, JetStar.
But SIA says Silkair will continue as a lower cost, full-service airline on routes that are marginal for mainline SIA operations.
The new carrier is expected to make money from the first year and joins a slew of low-cost carriers already in the region.
Carriers have been launched in Thailand, Indonesia and the Philippines in response to government moves to boost tourism and relax aviation regulations.
"If you look at the convergence of events - the economic development, the fact that GDP levels are going up and rapidly rising internet usage - they're all coming together in a way that means that all you need is that magic ingredient of a little liberalisation allowing point-to-point operations and there will be just massive, massive explosions of traffic," Mr Harbison said.
He dismissed suggestions low-cost carriers would struggle in Asia because of the need to rely on international markets.
While he conceded that cross-border operations were "a little bit harder", he said liberalisation was occurring as tourism authorities and airports sought ways to get some of the low-cost action.
"All these pressures are coming together simultaneously, making things very, very exciting," he said.
The CAPA boss said he believed Australia was too far away and its routes too thin to be an attractive destination for the low-cost carriers.
He also did not believe Qantas's international subsidiary, Australian Airlines, would be squeezed out by the Asian low-cost start-ups.
"Australian is a lower cost version of Qantas to operate the tourism-dominated routes," he said. "It's not no-frills, its low-frills. It's not under four hours, it's eight hours.
"It's part of this same phenomenon but it's different."
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