How can we maximise opportunities in the Asian market for Low Cost Carriers?

Dr Zheng Lei, a senior lecturer in Air transport management at the University of Surrey, holds a PHD  in Air Transport and Tourism management.

As an academic in his field, Lei has  taken part in various research projects surrounding different aviation policies, specialising in the Asian aviation market. Works such as, ‘Aviation policy in China: An analysis of recent development’s have allowed Lei to become a master in his field.

Prior to this role, he worked for six years in China’s travel and tourism industries in a variety of managerial and operational roles.  At this year’s World Low Cost Congress, he led one of the key round-table discussions; How can we maximise opportunities in the Asian market for Low Cost Carriers?

Below, are six key points Zheng Lei feels we should take away with us:

1) Joint ventures represent the way forward for Asian LCCs to bypass regulatory constraints.  Good examples are AirAsia Group, Jetstar Group, and Tiger Group. Japan is an interesting market to watch where both major airlines have adopted similar strategy to set up a joint-venture subsidiaries.

 

2) It is challenging to manage both full service and low cost carriers in the same group.  The key is to gain synergies and manage costs efficiency at the same time.  There are a number of advantages of dual brand strategy such as a more balanced network, and easier for the low-cost subsidiary to enter into a new market with the help of the parent.

 

3) Despite rapid development of LCCs in the Asian market, there are still lots of growth opportunities, particularly, in the Chinese and Indonesian markets.   z

 

4) Managing cultural differences is a challenging issue for cross-border LCC joint ventures.

 

5) Ancillary revenue will be increasingly important for Asian LCCs.  Those suppliers who are able to provide a whole package of integrated solutions will be winners in this market.

 

6) Further deregulation in the Asian countries (e.g. ASEAN, Japan) will provide more opportunities for Asian LCCs.  The boom of LCCs in Asia is sustainable and will continue in the next few years.

 

World Low Cost Airlines Congress 2015