Asia-Pacific low-cost airlines have begun serving secondary airports in what observers see as a natural development in line with similar moves in Europe and North America.
However, unlike in Europe and North America, where low-cost airlines have often been competing only against incumbent full-service airlines rather than other low-cost players, in Asia there will be more direct competition with new airlines serving the primary airports. This will make the battle to market secondary airport services tougher, say some, as the price differential will not be as great as that which was seen in Europe in the early days of low-cost operations.
Last year, Thai AirAsia – a 49%-owned associate of Malaysian low-cost carrier AirAsia – started serving Macau. Although Macau is a popular destination in itself, Thai AirAsia said it would market the service in part as an alternative to Hong Kong, which is less than a 1h ferry ride away and more expensive in terms of airport landing and parking charges. It has been reporting solid loads since.
Singapore's Tiger Airways is also now serving Macau, and has also described it as a much cheaper alternative to Hong Kong and other parts of southern China. However, industry observers believe it will have a tougher fight on its hands, as two other new Singapore-based airlines – Jetstar and Valuair – are serving Hong Kong International airport directly.
Jetstar Asia is also about to start operating to the Philippine capital Manila's main airport, while Tiger has just begun operations to a secondary airport, commonly known as Clark, around 70km (45 miles) outside Manila. AirAsia has also just started Clark services and is marketing them as services to Manila.
In Australia, Qantas' domestic low-fare subsidiary Jetstar serves Melbourne's main Tullamarine airport as well as the secondary Avalon facility, around 55km from Melbourne's central business district. Low-fare rival Virgin Blue only serves the main Melbourne airport. No-frills carrier Tiger's chief executive, Tony Davis, says: "If you can consistently offer the lowest prices you will develop markets. Our model, particularly with scarce traffic rights, is going to be more successful than saying, ‘I want to be in the queue to go to another major congested airport with all its traffic rights restrictions'."
Source: Airline Business
