Five reasons why budget airlines in Asia are successful

Despite a number of US based airlines going bust in the past few months, and all the talk of consolidation and more bankruptcies in Europe, the budget airlines in Asia seem to be doing rather well.

Tiger Airways, based out of Singapore, is expanding into Australia rapidly and there are talks of starting a Korean hub. Air Asia is doing better than ever on regional routes, and now starting long haul budget travel as well. Even though the growth of Indian budget carriers has slowed, they are still doing well, given the state of the industry in the rest of the world. The fact that ever more Asian airports are coming up with budget terminals is testimony to the fact that demand will increase in the near future. So what is it that other airlines can learn from the Asian budget carriers to be more successful?

  1. Use newer planes. Average fleet age at AirAsia is 4.7 years, 2.5 years at Tiger Airways, 4.4 years at Air Deccan. This not only ensures that planes are more fuel efficient, but the customers feel better and safer in air too. The youngest fleet in the US for a major airline is 8 years, at Alaska Air, though Virgin and JetBlue are changing the game a little there. Already, there have been rave reviews of Virgin’s fleet.
  2. Employ smart fuel cost-saving techniques. With fuel becoming a significant component of the cost, airlines should pro-actively think of ways to save costs in this regard. Techniques such as fuel hedging are very popular. Many airlines are now slowing down in the air, as well as making “gentle” landings to save fuel related costs.
  3. Charge only for value added items. Customers can be very disgruntled when they are charged for items they weren’t expecting to pay for. Unfortunately, a number of budget airlines have become very good at extracting every single penny possible from the customer. Ryanair once charged $50 to allow the use of a wheelchair to an elderly person. On the other hand, customers don’t mind paying more for extra legroom in the exit row. Similarly, there can be services such as priority boarding, or even a budget business class in a plane which can be sold for an extra charge. A number of Asian budget carriers are doing this already.
  4. Compete on experience and service. In most cases, good service at most customer touchpoints doesn’t cost a dime. Be it smiling check-in staff or compassionate stewards who care about the passengers like their own family. It is this that has got Southwest to where it is today. Airlines are leading the service industry, and should be setting exemplary standards too.
  5. Be an LCC+ The days when airlines used to only be “cheap flying buses” are over. More and more budget airlines have a “mixed” model where they offer value added services and are deviating from a pure-budget model. AirAsia is starting long haul flights, and value added services are being offered on a number of airlines. Simply put, it’s a good way to make money.

Ponder that!

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  1. Airlines moving from fixed costs to variable costs
Shashank Nigam

Shashank Nigam

Shashank Nigam is the CEO of SimpliFlying and a globally sought-after consultant, speaker and thought-leader on airline branding and customer engagement strategy. He is also the youngest winner of the Global Brand Leadership Award and has addressed senior aviation executives globally, from Chile to Canada and from Sydney to San Francisco.Shashank's perspectives have found their way into major media outlets, including CNN Travel, CNBC, MSNBC, Bloomberg UTV, Mashable and in leading publications like Airline Business, ATW, Aviation Week, and others.Shashank studied Information Systems Management and Business Management at Singapore Management University and Carnegie Mellon University. Hailing from India, he splits his time between Singapore and Vancouver, among other cities.
Shashank Nigam
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Showing 3 comments
  • Prateek Panchal
    Reply

    Hey i cherish this post!!!!….new information are always appreciated….Good one…..Cheers!!!
    Budgeting Tips

  • Friv
    Reply

    I am grateful for the information given. Thank you for being so generous enough to have shared your knowledge with us.

    kizi 1

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