Asia is different, even for LCCs - Harbison
(SINGAPORE: 18 January 2006) Executive Chairman of the Centre for Asia Pacific Aviation, Peter Harbison, opened the Low Cost Airline Symposium in Singapore today by advising airline industry participants not to overlook the differences that distinguish the Asian low cost sector from those in Europe and North America.
“While those saying that the LCC model would not work in the Asia Pacific region because of its differences were wrong, there are important differentiating factors in the sector and it is vital to understand them,” he said.
Mr Harbison provided several examples to illustrate his point, showing that, while the overriding goal of LCCs in the West is to post the lowest costs, there has been carefully planned, successful adaptation of the model in Asia. Examples include Jetstar Asia’s interlining programme and Virgin Blue’s “new world carrier”-themed hunt for higher yields.
Mr Harbison also noted other vital differences between the regions. “After the experience in the US and Europe, it was decided that low cost subsidiaries of full service carriers couldn’t work; in this region there are already six flag carriers with low cost subsidiaries and more are on the way. These examples further prove the distinctiveness of the Asia Pacific LCC industry. It is critical to understand that lessons from North America and Europe do not necessarily apply here”.
Closing his introductory remarks to the conference, which the Centre launched in 2004, Mr Harbison predicted continued growth of the low cost model in the Asia Pacific, and called on the region’s governments to allow the sector to grow to its potential by allowing enhanced LCC access to their markets.