Asian budget carriers tops in passenger load

In just over a decade, the Asian airlines have gone from an almost-zero presence to carrying 31 per cent of global budget travellers last year.

European carriers - which include Ryanair - accounted for 30 per cent of total traffic while North American airlines had 26 per cent market share, according to preliminary data compiled by the International Civil Aviation Organisation (ICAO).

Globally, budget airlines carried more than 950 million passengers last year, which is about 28 per cent of all air travellers, compared with 27 per cent in 2014.

Asia's share of the pie is expected to continue to grow, analysts said.

A rising middle class in India and China, and budget carriers still in their infancy in North-east Asia especially, will fuel growth in the sector, they said.

Growth will be slower in South-east Asia where overcapacity in the past few years hit profits and forced budget carriers to scale back their operations.

Mr Brendan Sobie, a Singapore- based analyst at aviation think- tank Centre for Aviation, said: "There will still be growth in this region, but it won't be at the level we saw in 2012 and 2013 when year- on- year growth was more than 20 per cent. We are probably looking at high single-digit growth."

He noted that budget carriers already account for almost 60 per cent of all intra-South-east Asian travel.

Much of the growth in this region this year will be in the long-haul budget sector, analysts said.

Singapore Airlines' subsidiary Scoot, for example, has gone from eight Boeing 787 aircraft in October last year to 10 now, with more to come in the next few years.

The airline, which already has a strong presence in the region, including in Australia and China, is also planning its foray into the Middle East and India later this year.

Overall, total global passenger traffic on both budget and full-service airlines grew by 6.4 per cent last year to hit 3.5 billion, ICAO said.

Despite sluggish economic growth in some advanced economies and most emerging markets, demand for air travel continued to rise, the United Nations body said.

This was due in part to a 40 per cent dip in the average jet fuel price, which gave airlines some flexibility to lower airfares, which in turn stimulated demand, ICAO said.

Travellers can expect the lower fuel prices and competition among carriers to keep fares attractive this year, analysts said.

karam@sph.com.sg

This article was first published on January 11, 2016.
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