Singapore says low-cost carriers growing at 'phenomenal' rate

One year after Singapore's first budget airline began operating there are 175 weekly low-cost flights from the city-state servicing 15 destinations around the region, he said.

This is up from 70 weekly flights servicing six cities six months ago.

"In Singapore, low-cost carriers now account for about 7 pct of Changi's flights, with this phenomenal growth achieved in just one year," Yeo said.

Valuair was the first budget carrier to set up in Singapore, on May 5 last year, with flights to Bangkok. It has since expanded operations to Jakarta, Hong Kong, Perth and the Chinese cities of Chengdu and Xiamen.

Tiger Airways and Jetstar Asia quickly followed in establishing their headquarters in Singapore, while the Thai arm of Malaysia's AirAsia also flies between the city-state and Bangkok.

Yeo made his comments in a speech to unveil some of the features of Changi's low-cost terminal, which is due for completion early next year and will be the first of its kind in the region.

He noted that the potential for low-cost airlines to grow regionally, not just in Singapore, was "tremendous".

"Budget travel in Asia is still in its infancy, comprising about 5 pct of the intra-regional market, as opposed to 10 pct in Europe, 25 pct in the US and 40 pct in Australia," he said.