South-east Asia’s budget airline boom turns brutal amid soaring costs, shrinking margins

Southeast Asia News

South-east Asia’s budget airline boom turns brutal amid soaring costs, shrinking margins
Budget AirlinesLow Cost CarriersAirasia
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SEOUL, June 19 — South-east Asia’s biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and...

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Demand for air travel in Asia is expected to grow faster than other regions in the next few decades and carriers like Vietnam’s VietJet Aviation and Malaysia-headquartered AirAsia are to buy more planes to add to their already large orderbooks as they seek to gain market share. International airfares in Asia dropped 12 per cent in 2024 from 2023, ForwardKeys data shows. AirAsia, the region’s largest budget carrier, reported a 9 per cent decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its customers.

Jetstar Asia said it had seen “really high cost increases” at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges. “Balancing supply to demand and costs to revenue have never been more critical,” the report said of the region’s airlines.South-east Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within South-east Asia so far this year were on budget carriers, compared to about one-third of international seats globally, CAPA Centre for Aviation data shows.

Low-cost carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of scale.

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Budget Airlines Low Cost Carriers Airasia Jetstar Asia Scoot Airlines Vietjet Sibu Pacific Cebu Pacific

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