The Southeast Asia – Low Cost Carriers (SE Asia – LCCs) are expected to see slowing growth in 2015 despite being the world’s fastest growing emerging markets, according to a report from the Centre for Asian-Pacific Aviation (CAPA).
In its report entitled “SE Asia - LCCs still dominate the agenda as flag carriers restructure”, CAPA said the Southeast Asian market has both challenges and promise. 2015 will mark the second consecutive year of stunted growth and potentially the second consecutive year of most airlines reporting figures in the red.
But improving market conditions, declining fuel prices and restructuring efforts are expected to reduce losses and stimulate new growth.
According to CAPA, SE Asia has emerged over the past decade as one of the world’s fastest growing emerging markets, capturing the attention of global suppliers. The rapid growth has been driven primarily by the rapid expansion of LCCs – both independent firms and subsidiaries of full service groups.
The report’s data also showed that LCC capacity in Southeast Asia has increased eight-fold over the last 10 years, from about 25 million seats in 2004 to nearly 200 million in 2014, while full service carrier capacity in the same period has increased by approximately 45 percent, or less than 5 percent per annum, from about 180 million seats in 2004 to 260 million seats in 2014.
By the close of 2014, Southeast’s Asia overall LCC fleet included 538 aircraft, a 13 percent increase over the year in comparison to a 30 percent rise of the previous year.
According to CAPA, market conditions were not favourable in 2014 and are expected to improve in 2015.
LCCs, including full-service airline group budget airline subsidiaries, are still driving most of the growth in Southeast Asia , the report said.-VNA
In its report entitled “SE Asia - LCCs still dominate the agenda as flag carriers restructure”, CAPA said the Southeast Asian market has both challenges and promise. 2015 will mark the second consecutive year of stunted growth and potentially the second consecutive year of most airlines reporting figures in the red.
But improving market conditions, declining fuel prices and restructuring efforts are expected to reduce losses and stimulate new growth.
According to CAPA, SE Asia has emerged over the past decade as one of the world’s fastest growing emerging markets, capturing the attention of global suppliers. The rapid growth has been driven primarily by the rapid expansion of LCCs – both independent firms and subsidiaries of full service groups.
The report’s data also showed that LCC capacity in Southeast Asia has increased eight-fold over the last 10 years, from about 25 million seats in 2004 to nearly 200 million in 2014, while full service carrier capacity in the same period has increased by approximately 45 percent, or less than 5 percent per annum, from about 180 million seats in 2004 to 260 million seats in 2014.
By the close of 2014, Southeast’s Asia overall LCC fleet included 538 aircraft, a 13 percent increase over the year in comparison to a 30 percent rise of the previous year.
According to CAPA, market conditions were not favourable in 2014 and are expected to improve in 2015.
LCCs, including full-service airline group budget airline subsidiaries, are still driving most of the growth in Southeast Asia , the report said.-VNA
