Research Trends and Results

An Analysis of the Entry/Withdrawal of Low-costCarriers(LCCs) in International flights in the Asian
Civil Aviation Market
INOUE Gaku, Senior Researcher
YAMADA Yukihiro, Research Engineer
ONO Masahiro, HeadAirport Planning Division, Airport Department(Key words)

Low-cost Carriers(LCC), OAG Flight Guide Worldwide, Airport Planning

1.Introduction
Based on Official Airline Guides (hereinafter referredas "OAG") and so on, we created a database of indicators
which represent features of the Asian civil aviation
market. Consequently, this paper reports on an analysis ofthe Low-cost Carriers(LCCs)’ entry/withdrawal into/frominternational flights in the Asian civil aviation market.
There is no similar analysis dealing with the Asian civilaviation market.
2.Method
Our analysis is based on the OAG. First, we selected
15 airlines which operate international passenger flights
from/to East and Southeast Asian airports. Such airlines
include both full service carriers (FSCs) and LCCs.
Secondly, we created a database consisting of the numberof seats and flights, the flight distance, the number ofairlines serving the routes and other characteristics
including the Gross Regional Product (GRP) and thepopulations of cities in which departure/arrival airports
are located. Lastly, we conducted a detailed analysis of
the impact of LCC's entry into the market. The effects ofairport expansion projects and multilateral Air
Transportation Agreements(ATAs) among ASEAN
countries are incorporated into the analysis. Our analysis
targets year-over-year for 2004-2012.
3.Major Findings(1) Average Flight Distance
In most cases, average flight distances of LCCs are inthe range of 1,000-2,000 kilometers while those of FSCs
are in the range of 2,000-6,000 kilometers.
(2) Average Number of Flights
The average number of flights for LCCs significantly
fluctuates year to year. Also, in most cases, average
number of flights for LCCs are in the range of 15-25 aweek for two-ways while those of FSCs are at most 14 a
week for two ways.
(3)Trend of Air Asia Entry/Withdrawal
About 55% of all Air Asia international flights connect
the following four countries: Malaysia, Indonesia,
Thailand and Singapore. Furthermore, on such routes, thenumber of flights is larger than those serving other routes.
(4) Trend of Jetstar Asia Entry/Withdrawal
Most routes operated by Jetstar have the following

Figure Number of AirAsia Flights
Number of Flights(weekly, two-ways)
2500

OthersMacao

2000

Australia

1500

VietnamHong Kong

1000

India
500
China02004 2005 2006 2007 2008 2009 2010 2011

Malaysia/Indonesia/
Thailand/Singapore

three features. First, other airlines including both FSCs
and LCCs also operate large number of flights on suchroutes. Second, both origin and destination are locatedintra Southeast countries. Third, neither Qantas norValuair both of which are intercompanies of the samegroup, operate on such routes. Also, about 60 percent of
all the Jetstar Asia international flights are onesconnecting Singapore and Kuala Lumpur/HongKong/Bangkok/Ho Chi Minh/Manila/Taipei in 2012.
(5) Trend of Tiger Airways Entry/Withdrawal
Tiger Airways has already halted its services on
one-third of the routes on which it had begun operating.
The duration between entry and withdrawal is at mostthree years. Tiger Airways avoids competition with
Jetstar: the number of routes which are operated by bothairlines is low. It is assumed that Tiger Airways avoids
service cannibalization.
4.Concluding Remarks
We are planning to conduct a further detailed analysis
using the database which we have already created.
Specifically, such analysis is focused on the impact byprogress of further ASEAN ATAs and projects for airport
capability enhancement.
[Sources]
TECHNICAL NOTE of NILIM No.757
http://www.nilim.go.jp/lab/bcg/siryou/tnn/tnn0757.htm