Asian LCCs to take 20% share of Asia Pacific: CAPA

Sydney, Mar 13 (UNI) The Centre for Asia Pacific Aviation (CAPA) forecasts low cost carriers will expand their seat capacity in Asia Pacific and West Asia by over 230 per cent by 2012 over current levels In other words, there will be 40 to 50 per cent capacity growth each year over the next five years, according to CAPA's Outlook 2007 report.

The forecast is based on announced aircraft orders by existing LCCs. Given reasonably sound fundamentals over the rest of this decade, the number of new entrant LCCs will grow significantly.

A key story in the Asia Pacific region for 2006 was capacity restraint of full service airlines, resulting in higher load factors. But there was a price.

They lost market share, particularly to European and West Asia carriers, as well as the fast-growing Asia Pacific LCCs, said CAPA's executive chairman Peter Harbison.

According to the outlook report, Asia is a two-speed market with flag carriers growing much more slowly than other airlines including carriers of India and China and the LCC sector.

The Association of Asia Pacific Airlines (AAPA) carriers increased aggregate capacity (ASKs) by just 0.9 per cent in 2006 while Asia Pacific LCC capacity surged 55 per cent year-on-year in 2006 to account for 8.9 per cent of the regional total and close to 11 per cent in the last quarter of 2006.

''Based on recent LCC growth rates and aircraft orders, their share could reach 20 per cent by the end of this decade with much higher levels of penetration in such markets as India, Thailand, Australia, Malaysia and Indonesia.

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