Low-cost carriers eyeing Asian long-haul market

Low-cost carriers eyeing Asian long-haul market

03:20
Low-cost carriers such as Norwegian Air are eyeing the Asian long-haul budget market, with the airline saying that it is not facing intense competition in the area.

PARIS: Low-cost carriers such as Norwegian Air are eyeing the Asian long-haul budget market, with the airline saying that it is not facing intense competition in the area.

Speaking to Channel NewsAsia on the sidelines of the Paris Air Show which ended on Sunday (Jun 25), Thomas Ramdahl, chief commercial officer of Norwegian Air, said that the airline plans to expand its network in Asia as there is big demand for budget long-haul flights into the region.

"As long as we get the overflights over Russia, we are going to expand in 2018, 2019," he said. "We have 11 aircraft coming in next year and we do also look at cooperation with other Asian carriers, so we can bring them into Bangkok, Singapore for instance, and they could fly onwards with Jetstar, as an example."

The airline had announced in April that it will launch a non-stop service between Singapore and London in September this year, with fares starting from S$199 for economy class. Norwegian Air already flies from its home base in Oslo to Bangkok.

Trade visitors throng static display at the Paris Air Show. (Photo: Calvin Hui)

The Asia market will also see strong passenger growth and new aircraft demand, according to industry experts.

"Passenger traffic has been very strong so far this year, and we expect to see it grow 4.7 per cent each year over the next two decades," said Randy Tinseth, vice president of Marketing, Boeing Commercial Airplanes.

More than half of new aircraft demand over the next 20 years will also come from the Asia market, Boeing said in a press release.

However, analysts said that Chinese carriers and aviation hubs would be best positioned to take advantage of this.

“The Chinese carriers have been offering strong competition to the established hubs like Singapore and Kuala Lumpur, and so whether it's with China Southern or the Hainan group, Air China, and even the low-cost carriers in China, offering non-stop point to point services to China when previously (they) would have gone via different hubs”, said aviation consultancy ICF International's Richard Brown.

Legacy carriers such as Singapore Airlines and Cathay Pacific, meanwhile, have come under stress, with Singapore Airlines announcing a fourth quarter net loss of S$138 million earlier this year. Hong Kong-based Cathay Pacific also announced it was cutting 600 staff after reporting its first annual loss since 2008 earlier this year.

Singapore Airlines, however, has recognised the potential of long-haul budget flights, and recently started flights between Singapore and Athens through its low-cost subsidiary Scoot – with more routes to be introduced next year.
 

Source: CNA/nc