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.