By KENNY CHEE

BUDGET airlines are seeing brisk business and several are expanding this year, but industry players warn that further growth may be stunted as the credit squeeze continues and protectionism becomes a problem.

The economic downturn has opened business opportunities for budget carriers as cost-conscious consumers seek cheaper air travel, said Mr Tony Davis, president and chief executive of low-cost carrier Tiger Airways, at an industry conference yesterday.

The Singapore-based airline saw a 50 per cent increase in passenger volume in the quarter ending December, compared to the same period a year ago.

The carrier plans to open a third base of operations in Australia, possibly in Darwin, after Melbourne and Adelaide. Two other budget airlines - Malaysia- based AirAsia and Australia- based Jetstar - also have plans to expand.

However, budget carriers that have over-expanded could face problems filling up their excess seats when people return to full-service airlines as the economy picks up.

Protectionism is also a concern as countries put up barriers to entry to shield stateowned, full-service airlines from falling demand, Mr Davis said.

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