Australia to attract up to 10 ASEAN budget airlines

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Tiger_Airways_AustraliaAustralia close to attracting service by the end of 2014 from at least three new Southeast Asian carriers. Up to 10 Southeast Asian carriers, including five from Indonesia alone, could launch services to Australia by the end of 2016, the Center for Aviation reported.

The new entrants, along with continued expansion from the 20 carriers already operating scheduled flights flights between Australia and Southeast Asia, will impact a market that is already suffering from overcapacity. Further reduction in fares will likely result, particularly as all but one of the potential new entrants are low-cost carriers.

The new competition poses yet another new challenge for the Qantas Group, which is struggling to compete in the Australia-Asia market. Other full service airlines – including Singapore Airlines, Garuda, Malaysia Airlines and Thai Airways – will also have to adjust plans as the Australia-Southeast Asia market sees further significant increases in the low-cost carrier penetration rate beyond the current 30 per cent.

There are currently 20 carriers offering over 600 weekly return frequencies and about 344,000 weekly return seats between Australia and Southeast Asia. Capacity over the past year is already up about 17 per cent, pressuring yields and load factors. Profitability in the market also has been impacted by the depreciation of the Australian dollar.

Four of the 20 carriers operating non-stop services between Australia and Southeast Asia are Australian – Qantas, Jetstar Airways, Virgin Australia and small regional carrier Airnorth – and account for about 23 per cent of total seat capacity in the market. Two carriers are from the Middle East – Qantas partner Emirates and Virgin Australia partner Etihad – and one is from Europe, British Airways.

The remaining 13 carriers competing in the Australia-Southeast Asia market are from Southeast Asia and account for about 69 per cent of total seat capacity. This includes five carriers from Singapore, two each from Malaysia and Indonesia and one each from the Philippines, Thailand, Vietnam and Brunei.

Over the next two to three years the number of Indonesian carriers serving Australia will likely increase to six or seven. A second Thai, Philippine and Vietnamese carrier could also join the mix – plus possibly a third from Thailand and a third from Malaysia.

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Reading Time: 2 minutes

Australia close to attracting service by the end of 2014 from at least three new Southeast Asian carriers. Up to 10 Southeast Asian carriers, including five from Indonesia alone, could launch services to Australia by the end of 2016, the Center for Aviation reported.

Reading Time: 2 minutes

Tiger_Airways_AustraliaAustralia close to attracting service by the end of 2014 from at least three new Southeast Asian carriers. Up to 10 Southeast Asian carriers, including five from Indonesia alone, could launch services to Australia by the end of 2016, the Center for Aviation reported.

The new entrants, along with continued expansion from the 20 carriers already operating scheduled flights flights between Australia and Southeast Asia, will impact a market that is already suffering from overcapacity. Further reduction in fares will likely result, particularly as all but one of the potential new entrants are low-cost carriers.

The new competition poses yet another new challenge for the Qantas Group, which is struggling to compete in the Australia-Asia market. Other full service airlines – including Singapore Airlines, Garuda, Malaysia Airlines and Thai Airways – will also have to adjust plans as the Australia-Southeast Asia market sees further significant increases in the low-cost carrier penetration rate beyond the current 30 per cent.

There are currently 20 carriers offering over 600 weekly return frequencies and about 344,000 weekly return seats between Australia and Southeast Asia. Capacity over the past year is already up about 17 per cent, pressuring yields and load factors. Profitability in the market also has been impacted by the depreciation of the Australian dollar.

Four of the 20 carriers operating non-stop services between Australia and Southeast Asia are Australian – Qantas, Jetstar Airways, Virgin Australia and small regional carrier Airnorth – and account for about 23 per cent of total seat capacity in the market. Two carriers are from the Middle East – Qantas partner Emirates and Virgin Australia partner Etihad – and one is from Europe, British Airways.

The remaining 13 carriers competing in the Australia-Southeast Asia market are from Southeast Asia and account for about 69 per cent of total seat capacity. This includes five carriers from Singapore, two each from Malaysia and Indonesia and one each from the Philippines, Thailand, Vietnam and Brunei.

Over the next two to three years the number of Indonesian carriers serving Australia will likely increase to six or seven. A second Thai, Philippine and Vietnamese carrier could also join the mix – plus possibly a third from Thailand and a third from Malaysia.

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