THERE MAY BE some great flight deals to be had post-Sars, but we still don't have our own low-cost Asia-wide airline. No-frills carriers, such as Ryanair in Europe and Southwest in America, have been phenomenal hits. Passengers give up (supposed) posh meals, leg room and refund rights for bargain prices - with flights from London to Venice costing as little as #12 (HK$155). Operating over short distances, the low-cost carriers have quick turnarounds, higher seat density and, in the case of Ryanair, industry-leading operating margins of 30 per cent. For its part, Southwest already carries more passengers than any other airline in America. Asian carriers wishing to emulate this success have been deterred by the need to negotiate Air Service Agreements (ASAs) with each country. In addition, a national carrier has traditionally been seen as a symbol of national pride which doesn't take kindly to bargain-based entrants. Nonetheless, some ASAs do have excess capacity that can be picked up by new entrants and double or multiple designation agreements can free up routes on heavily travelled paths such as Singapore to Bangkok. Noticing the knock-down prices overseas, travellers are crying out for a regional low-cost carrier. So far, only Malaysia's AirAsia fits the no-frills model, but it doesn't fly outside the country. Established carrier Singapore Airlines (SIA) announced last month that it was looking into developing its own low-cost service, while a former SIA managing director registered ValuAir for business as the first step to setting up operations. The Informer asked those involved in this capital-intensive business how soon we might be able to get our own cheap deals. Tony Fernandes, CEO, AsiaAir: 'The big challenge for Asia is that we don't have one market, one land mass or one currency as they do in Europe. It's to be seen whether an airline can go beyond its own borders. Having said that, we've gone through the hard work and the pain to show the no-frills concept can work. For example, 40 per cent of our business is through the Internet, our turnaround time is 20 minutes, and we are showing we can operate out of big airports. The no-frills concept has been adopted by the Malaysian public. Two million of them have travelled with us. People think national airlines have to reflect the flag of that country, the whole well-being of the national entity. That has changed to a certain extent. Loyalty to national carriers is beginning to break down. The Malaysian experience shows we don't necessarily cannibalise existing traffic. We are driving the market for those who weren't able to fly before. I'm confused as to why SIA wants to get into this market because they already have a good product. Low-cost airlines bring tremendous benefits. We have brought jobs into an industry that's struggling. We bring major benefits to airports. KLIA [Kuala Lumpur International Airport] has had two million passengers that they wouldn't have had without us. Airports are hungry for us.' Rick Clements, vice-president, public affairs, Singapore Airlines: 'We made an announcement a couple of weeks ago that we are looking into setting up a no-frills airline. We have a team of executives looking into it that will report to the CEO. We expect a decision to be made before the end of this year. We are looking into an airline that is quite separate from Singapore Airlines and SilkAir [the 100 per cent SIA subsidiary]. If there are unused traffic routes between Singapore and another country, then the Civil Aviation Authority of Singapore could enable another airline to operate on those routes. Obviously, we want to take advantage of any routes that already exist.' Peter Harbison, managing director, Centre for Asia-Pacific Aviation: 'The low-cost airline phenomenon is creating such waves it's almost impossible to prevent it. People are thinking why can't we have them too? And regional tourism authorities are looking to stimulate travel and exerting pressure to try and influence government views. Sooner or later that wave will breach the sea wall of regulations. How long it takes to happen is another issue. There's an incredible potential upside if the regulatory control were to be removed. The great cost differential makes it virtually impossible to drive them from the market. By lowering the cost of an air ticket you increase the threshold dramatically of people who can travel. We are talking about tens of millions of people who are liberated to travel. Just look at Japan alone. They have something like 40 regional airports and about 140 cities that aren't currently receiving international traffic that have populations of at least half a million people. You will be looking at five to 10 of these entities within a couple of years.' Ivan Tham, executive director and chief investment officer, HLG Asset Management: 'AirAsia has got costs low enough that Malaysians can choose between taking the bus or going on an airline. They have been able to cater to a new set of customers. There is no open-sky pact between Asian countries. It's an issue of landing rights and any deregulation would have to be approved by governments. I don't think that's going to happen overnight because landing rights are going to compete with the national carriers and I don't think major airlines will give them up easily. The fact that SIA is looking at setting up a budget airline must be saying something. Low-cost Virgin Blue has talked about expanding to Thailand, Singapore and the Philippines as possible destinations.'