CAPA chief Harbison says LCCs may make incumbent Asian carriers irrelevant
01 Feb 2007
Centre for Asia Pacific Aviation (CAPA) executive chairman, Peter Harbison, has warned that Asia's major incumbent carriers may likely face extinction, certainly irrelevancy, if they fail to face up to the challenge being posed by low cost carriers (LCCs).
Speaking at the Low Cost Airline Congress in Singapore on Tuesday, Harbison said, "The aviation world will never be the same. Any new entrant must be low cost and any existing airline not heeding this message will become an ex-airline."
Harbison pointed out that there were now a variety of airline models in operation in Asia, unlike the all-similar "department store airlines" of yesteryears. "Hybrid models are evolving with characteristics specific to their own environment," he pointed out. In this regard he named operators such as Virgin Blue.
Other LCCs were taking on a special Asian characteristic, he said, like AirAsia X and VIVA Macau. He also pointed out Asia was now witnessing a "rapid development of low cost long-haul models, like Oasis Hong Kong and Jetstar."
"These hybrids are defying many of the "basic" rules. But they have one common ingredient - a passion for cost reduction," said Harbison.
Pointing out that very likely there would be twice as many Asian international airlines in five years, as compared to now, he trashed talk of consolidation amongst airlines as "nonsense." According to Harbison, though a few exits could occur, big players such as Singapore Airlines and Thai Airways weren't likely to consolidate. " It's just too difficult and the market is expanding too fast," he said.
The CAPA chief also marked out 2007 as an important year for liberalisation of aviation policies by governments, but warned of government inertia. Issuing a clarion call, Harbison said, "It's wake up time. The only thing preventing economic expansion for hundreds of thousands of people, especially in regional centres, is the dead hand of government aviation policy. We need to shout that message at every opportunity."
