The Lowe Down
December 2007
Aviation in Southeast Asia
A Key Battleground
Aviation in Southeast Asia continues to grow and expand across both
the full service and low cost sectors of the industry, leaving
travelers on all budgets spoiled for choice. As more people than ever
before take to the skies, fares and amenities on full service carriers
in the region are increasing, keeping pace with worldwide trends as
fuel costs surge and the increasing demands of premium passengers,
while at the same time, low cost carriers are chipping away at these
legacy carriers' loyal customer base with fares as low as $1 on busy
routes before taxes.
As budget carriers in Southeast Asia start to go long haul, these
diametrically opposed sectors of the aviation industry are about to go
head to head, making the region a key battleground in the ever
increasing war between old stalwarts and new upstarts.
Just who will emerge as the winner?
Full Service goes Luxe
On October 25th, 2007, Singapore Airlines (SQ) launched the Airbus
380, the European aircraft consortium's beleaguered double-decker
jetliner on the busy Sydney - Singapore sector, ending the almost two
year delivery delay that left the airline's management red-faced after
their expected early 2006 launch.
As soon as the 471 seat plane took to the skies, however, the
embarrassing delay was quickly forgotten, and passengers were soon
gushing about the much anticipated First Suites, touted as 'A Class
Beyond First,' that give guests not only sliding privacy panels, a
full sized duvet equipped bed, but also the chance to join the mile
high club, a membership program the airline quickly dampened with a
press announcement released shortly after the first flight, gently
reminding passengers that 'unusual' behavior was not allowed onboard.
Still, with over 100 movie choices on Kris World, SQ's entertainment
system, matched with hundreds of games and music CD's, passengers in
all classes will find plenty of ways to keep themselves occupied on
the eight hour flight. It is just one way Singapore Airlines is trying
to distance it as far from the offerings of budget carriers as
possible. In fact, the experience aboard SQ is still head and
shoulders above even other full service carriers like Lufthansa, which
still has not upgraded its fleet with personal television screens.
While just one A380 has been delivered to SQ, in February 2008 a
second jet will arrive and be put into service on the Singapore -
London route. San Francisco is expected to be served via Hong Kong
also by the A380 in the fall of this year.
Fast growing Qatar Airways (QR) now offers one-stop service to Europe,
Africa and the east coast of the United States from Vietnam, with
fares that are far below those of other full service carriers; return
flights to Africa are as low as $980 USD, including taxes; passengers
are given a free hotel in Doha on all stopovers longer than six hours.
With a much touted service that has surpassed that of arch rival
Emirates, QR is expanding even further around the world, with expected
flights to Brazil and even Argentina, offering the first cost
effective way of reaching South America from Southeast Asia.
Vietnam Airlines' recently inaugurated a Hanoi – Luang Prabang – Siem
Reap – HCMC route that opens up a direct connection between UNESCO
World Heritage routes, eliminating the need for a connection in
Bangkok. With Indochina's tourism industry booming , more point to
point flights connecting boutique destinations like Mandalay, Pagan,
Siem Reap and Chiang Rai will be inaugurated, with prices to match the
deep pockets of the well heeled.
Low Cost? Really?
Foreign travelers are often surprised at the reality of the low cost
carriers in Asia, which are often a huge step above even full service
airlines in places like the USA and Europe, where lengthy delays,
tattered planes, surly cabin crew and lost baggage are not the
exception but the norm. Though you won't find a comfy bed or even warm
blankets onboard the aircraft of most Asia's budget airlines, many
offer spotless lavatories, personal televisions (PTV's), and smiling
crew.
Fleeted with brand new Airbus 320's, and flown by foreign pilots, low
cost carriers like Tiger Airways, Air Asia and Jetstar Airways have
aggressively expanded into Vietnam, the Philippines, Malaysia,
Cambodia, Myanmar, and Indonesia, flying through hubs in Kuala
Lumpur, Bangkok and Singapore, where a dedicated low cost terminal has
been constructed at Changi airport. Tapping into the rising demand
for quick weekend breaks, and passengers unwilling to pay $400 USD for
just a one hour flight, capacity is close to bursting at peak periods
like Christmas and Chinese New Year.
Expansion plans have only been hampered by the lack of pilots and
available planes, though orders are strong: Tiger recently purchased
$500 million worth of Airbus jets to fill out its fleet; Tiger Airways
has recently launched domestic service in Australia from its base in
Melbourne, giving passengers in Bangalore the ability to connect all
the way to Brisbane.
Despite the popularity of these budget carriers, many legacy carriers
like Thai, Singapore and Cathay Pacific aren't worried: with the bulk
of their passengers connecting from long haul to short haul flights,
they still manage to fill regional routes without a problem. This has
not been the case for Malaysian Airlines, who has lost so much market
share on domestic routes to Air Asia that it is teetering on
bankruptcy, as financial shockwaves affect the airline's entire
system. With some of the strongest branding and marketing campaigns in
the world, Asian carriers are hopeful this will continue to steer
loyal customers back onto their planes again and again, shying away
from their bare bones cousins.
Low Cost goes Long Haul
This attitude is bound to change with several budget airlines going
long haul. In late 2006 Jetstar quickly launched service to Phuket,
Honolulu, and Ho Chi Minh City, bringing fares to Australia to just
less than $300 USD each way including taxes. Just over a year after
launching their non-stop service to Ho Chi Minh City from Sydney, the
Jetstar flight is still going strong, offering travelers onward
connections to numerous Australian capital cities.
Air Asia's recent purchase of Airbus 330's to service long haul
destinations in Europe and Australia has attracted the attention of
the industry, who has watched the small airline mushroom into a
serious player. Hong Kong's Oasis Airlines has been doing so well on
its Hong Kong London service, that it has added Vancouver, Canada as
well.
Is the time far off where travelers can circle the globe via budget
airlines alone? There are still large areas of the world where low
cost airlines do not fly, such as Africa, but with South America
quickly catching up with cheap flights offered by Brazil's GOL
Airlines, the day can't be far away, creating serious challenges for
the cash strapped and debt burdened carriers finally emerging from the
dark days after 9/11.
Caveats
For millions of travelers cautiously dipping their toes into the low
cost experience, they ask: what exactly is the attraction of flying so
cheap? With no meals, no drinks, no amenities, skimpy baggage
allowances and often punishing fees for date changes, it seems even
breathing aboard budget airlines will cost you. For a certain kind of
traveler, this suits them just fine, happy to slum it in cramped seats
and in flight entertainment starved planes (Europe's Ryanair famously
did away with seat pockets and even window shades in an effort to
reduce weight, and fuel cost, aboard their planes) eager to reach
their destination without the perks and goodies that have long been
taken for granted.
While it may be smiles all round on board Asia's cheap carriers,
passengers still have to contend with seat assignment-less flights
like those aboard Air Asia and Tiger Airways, where the boarding call
can easily descend into chaos as passengers smash their way onto the
plane. Once on board, horrifically cramped seats combined with no
meals or snacks can turn even a one hour flight into pure hell: your
seatmate may be lugging a durian that will get cracked open mid
flight, and that screaming kid three rows in front of you will have
not even a finger puppet to distract him.
Many passengers may be surpri sed to learn that most low cost carriers
like Tiger Airways are actually partly owned by the likes of Singapore
Airlines, and Jetstar wholly owned by Qantas, giving many an
in-the-know airline industry analyst the future shape of the industry:
if even the legacy carriers are getting in on the low cost gold rush,
is this what the future of air travel holds? If passengers are willing
to do away with virtually every comfort to save a buck, then maybe we
should all be booking a Singapore Airlines First Suite as soon as we
can, before it is ripped out and replaced with more cramped seats.