Business takes off again for LCCs flying in Southeast Asian markets

BANGKOK — Low-cost carrier airlines in Southeast Asia are regaining momentum a er having struggled with a decline in passenger numbers due to the novel coronavirus pandemic. e recovery of the LCCs will likely a ect the business strategies of many Japanese and Japanese-a liated companies, which place importance on the Southeast Asian markets.

ENTRY REGULATIONS EASED

Don Mueang International Airport in the north of Bangkok serves as a major hub for LCCs that operate short-distance routes within Asia.

“anks to the low prices of LCCs, I can visit my hometown more frequently than before,” said a 41-year-old company employee returning to the ai capital from southern ailand.

Southeast Asian economies rely heavily on the tourism industry. Following the easing of coronavirus-related entry restrictions, many LCCs in the region announced a major step-up in ight services.

New airlines are making inroads in the market, too.

In Indonesia last year, Super Air Jet began operating a number of routes, including one that connects Jakarta and

Bali Island. e company aims to lure young millennials to local resorts.

In Malaysia, meanwhile, plans are afoot to launch a new LCC in the near future.

STRATEGY SHIFT

Many major airlines in Southeast Asia are government-a liated, which has impacted their business e ciency. From the 2000s, LCCs, buoyed by economic growth in the region, began offering lower airfares.

Many LCCs have increased their presence in areas where ying serves as

a crucial means of mobility. During the pandemic, Southeast Asia, like regions all over the world, saw a sharp decline in passenger numbers, leading to disastrous business results. One LCC — a joint venture between ailand and Singapore — was forced into liquidation.

A number of LCCs have rewritten their business strategies. In January, AirAsia, a pioneering LCC based in Malaysia, changed the name of its holding company to Capital A. e holding company now directs much of its energy to digital service elds, such as ride-hailing services and food delivery. Tony Fernandes, who heads the holding company, said in a statement that AirAsia is “no longer a mere airline rm.”

In related moves, Vietjet Air of Vietnam has bolstered its cargo ight service, and Nok Air of ailand has upgraded its services across the board to help distinguish it from rivals.

FIERCE COMPETITION

Scoot of Singapore and Cebu Paci c Air of the Philippines have introduced larger planes and increased ights on their mid- and long-distance routes. Such moves will likely a ect the business strategies of Japanese rival rms.

In the latter half of next scal year, ANA Holdings will begin operating a new subsidiary airline, Air Japan Co., which will o er higher-level services than ANA group rm Peach Aviation Ltd. Both subsidiary airlines are eyeing Southeast Asian service routes.

Among group companies of Japan Airlines Co., Zipair Tokyo operates services between Narita Airport and ailand, as well as Singapore.

Competition among LCCs is set to become increasingly erce. An o cial of a Japanese LCC expressed a sense of urgency, saying, “Unless [Japanese LCCs] demonstrate advantages peculiar to Japan, such as high-quality services, it will be di cult for them to di erentiate themselves [from foreign rivals].” (Aug. 15)

The Yomiuri Shimbun A Southeast Asian LCC plane is seen at an airport in Bali.