By: Air Traveller PH Staff
Low Cost Carriers (LCC) are a key factor in the growth of the Southeast Asia aviation industry, the second largest market in the Asia-Pacific aviation industry. In a forecast by Boeing, fleet growth of Southeast Asia airlines are at 5.7% in the next 20 years.
From 2008 to 2018, LCCs have grown by 395% compared to full service carriers whose capacity has only grown by 40% on the same period, making Southeast Asia the largest LCC market in the Asia-Pacific region. While vast majority of these LCCs fly within domestic and regional routes, they are now quickly expanding internationally.
Between 2019 to 2038, Southeast Asian Air Travel Growth show a 7.1% annual growth rate while Revenue Passenger Kilometers (RPK) for intra-Southeast Asia routes are projected at 900-billion.
A forecast from Boeing shows that in the next 20 years, around 3,650 single aisle aircraft will be delivered to Southeast Asian carriers comprising of almost 81% while widebody aircraft are projected at 820 only or 18%.
In the Philippines alone, budget carrier Cebu Pacific owns 50% of the domestic market share while other airlines like Philippine Airlines, Philippines AirAsia, SkyJet, and AirSwift all account for the other half.
Many of the full-service or legacy carriers are responding to the increased competition by LCCs in the region by creating their own LCCs serving both domestic and international markets.
Growth drivers of the LCCs in Southeast Asia are above average economic growth, increasing disposable incomes, expanding middle class populations, and liberalization especially on intra-Southeast Asian routes.