The Low-Cost Market in Asia - How a Growing Market Reacts To LCCs

Recently I took a look at the two, arguably, biggest low-cost markets in the skies, the American and the European markets. Today we will take a look at yet another one of these rising giants, the Asian LCM (Low-Cost Market).

Unlike its counterparts, the Asian market is still growing to its full strength even when it comes to full-service carriers. However, this has not stopped the rise of huge low-cost carriers throughout the continent, with over 60 different carriers flying inter-continental flights in Asia. These 60 carriers currently represent around 29% of the Asia-Pacific market share, 50% of domestic market share in seven countries and 30% of the international market share in six countries.

Photo by AeroNewsX/Paul Schmid

How Does The Market State Affect The Carriers?

Asia is set to become the biggest aviation market in the world within a few years, and LCCs have taken advantage of these huge markets to setup shop and begin operations. Unlike in Europe or the US, in Asia, low-cost carriers don’t have to compete with airlines that are over 70 years old, with some exceptions of course. This helps a lot as the people flying aren’t bound to an airline due to tradition.

However, the market isn’t without its issues, as in places like China the government still holds a tight grip on the aviation market and hasn’t allowed many LCCs to setup bases. In addition to government controls, airlines throughout the continent have also had to deal with the biggest issue any airline can face - huge growth over a short time period. This has led to severe issues and even bankruptcies.

Photo by AeroNewsX/Paul Schmid

What About The Flag Carriers?

Just like in Europe, flag carriers are suffering, with airlines such as Korean Air currently struggling to keep a grip on the Asian Market. In addition to this, the continents' political and social issues don’t help airlines stay afloat, with airlines such as Air India finding themselves in a tough spot.

However, unlike in other markets, even though budget airlines have steadily gained market share over the years, full-service carriers are also steadily growing despite the issues faced by some.

Photo by AeroNewsX/Paul Schmid.

What Can We Expect In The Future?

As of yet, it’s very hard to tell. With a market base as big as Asia, there is more than enough space for airlines to grow , even if low-costs have begun to represent a bigger market share.

To add to this, I don’t believe it would be fair to compare this market to the ones we have previously analysed here due to its specific properties, which make it even harder to perceive what might come to pass.

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