Bright prospects for low-cost airlines in Asia, Middle East

The company’s analysis paints a picture of strong capacity growth across Asia and the Middle East with only modest increases across Europe and North America. 

“Deploying effective data analysis tools that can seek meaning among huge volumes of data can give companies the edge,” Amadeus’ Air Traffic solution analysis said.

Low-cost carriers in Indonesia (capacity up by 12.3 million seats), India (up by 3.0 million seats), Thailand (up by 2.0 million) and Malaysia (up by 1.8 million) were responsible for half of total, global LCC capacity growth. 

Asia showed the strongest growth rates of any region with a 28-per-cent overall increase, compared to the first half of last year, to reach 129 million departing LCC seats. 

When capitals are examined, it is evident that capacity increases are being driven by emerging Asian nations. Jakarta saw the strongest absolute LCC capacity growth of any capital, increasing by 2.8 million seats or 44 per cent, closely followed by Bangkok, up 1.2 million seats or 30 per cent. The heavily developed Tokyo market also saw a significant increase in LCC seat capacity, which suggests the traditional focus on full service could be changing. 

Europe’s 0.8-per-cent overall LCC capacity growth masks a far more complex picture. Across much of Southern Europe, LCCs have reduced capacity, with Madrid seeing a fall in LCC departing seat capacity of 27 per cent, the highest of any capital in the region. Athens and Rome also saw significant percentage decreases. 

 

Sharp contrast

This picture contrasts sharply with the situation in much of Eastern and Northern Europe, where Warsaw witnessed an enormous jump in LCC capacity of 63 per cent. LCCs now represent 27 per cent of total departing capacity from the city. Istanbul and Copenhagen also saw LCC capacity increase sharply. 

On a global city basis, London’s LCC seat capacity is by far the largest with nearly 15 million available. That is roughly 1.5 times the available seats at the next largest LCC city, Sao Paulo. However, the rates of growth at Jakarta (44 per cent) and Kuala Lumpur (15 per cent) suggest the third and fourth placed cities may move up the top 10 ranking over the coming years. 

“We see a natural boom in LCC capacity across Asia, where point-to-point air travel is largely underserved. However, across the mature markets of Europe and North America capacity is constrained, which may explain why some LCCs are considering new approaches to secure future growth,” LCC specialist Alexandre Jorre said. 

With a 25-per-cent rise, LCC bookings in Amadeus are growing significantly, which is a very encouraging sign that its ability to adapt to LCC distribution needs is proving attractive to both travel agents and airlines. 

“LCCs are seizing the opportunity we offer to penetrate the high-yield business travel market and expand into new regions where they have limited brand presence. To maximise these benefits, we keep innovating, as demonstrated by the new range of light ticketing enhancements just implemented for easyJet, which keep it simple for LCCs and make it far more efficient for agents to book and service LCCs.”

Amadeus Air Traffic is part of Amadeus’ Travel Intelligence Portfolio of solutions.