Asia’s budget airlines eye growth, trade barriers

Jetstar Asia & Valuair, Tiger Airways

The Associated Press reports that Asia’s budget airlines should benefit from bargain hunting travelers amid a global economic slowdown, as long as government barriers don’t stifle expansion of this still young business, industry experts said. Low-cost carriers are poised to take advantage of falling fuel costs and increased demand for cheap fares as full-service airlines struggle with a global collapse in consumer demand, they said. “These times are very good for low-cost carriers,” said Bruce Buchanan, CE of Jetstar Airways. “We’re seeing quite strong demand. Six months ago it was a much tougher environment.” Budget airlines have flourished this decade in Asia as the region opened routes to competition. However, governments could scuttle that growth by returning to protectionist policies in a bid to save jobs at national flagship carriers, many of which are state-owned, said Peter Harbison, an industry consultant at the Sydney-based Centre for Asia Pacific Aviation. Tiger Airways CE Tony Davis said that while a surge in protectionism is the industry’s biggest risk, governments also face pressure to boost tourist revenue. “I don’t think protectionism will flourish in this market,” Davis said. “Progress is being made.”

Prahok @ February 12, 2009