Southeast Asia’s budget airlines bet on travel demand, despite competition woes
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An airplane of VietJet Airline is seen at Noi Bai International Airport, in Hanoi, Vietnam, May 28, 2025.—Reuters
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Seoul: The largest budget airlines in Southeast Asia is gaining a race to expand its capabilities despite the rising cost pressure, which is squeezing profits, and Qantas Airways has been forced to shut down the off -shot Jet Star Asia based in Singapore.
In the past two decades, low -cost carriers have spread to Asia when disposable revenue increases, supporting Chinese tourists with strong demand for travel. It is expected that air travel demands in Asia are expected to grow faster than other regions in the next few decades, and that Vietnam’s Vietnamese Aviation and Malaysia’s headquarters Air Asia are trying to buy more aircraft to add more aircraft to the market.
But the margin is thinner than other regions. The International Air Transport Association (IATA), a company in the airline industry, expects Asia -Pacific Airlines to have a net profit margin of 1.9 % compared to 3.7 %.
Airlines across Asia have restored capacity to a great extent since pandemic diseases, which have intensified competition, especially for price -sensitive budget passengers, and the recent high levels have drawn airplanes.
Forwardic data shows that international aircraft in Asia decreased by 12 % in 2023 in 2023. Air Asia, the largest budget carrier in the region, has reported a 9.0 % decline in average aircraft in the first quarter as it has increased capacity and has transferred its customers to low fuel prices.
The costs of airlines are also increasing the challenges, such as labor and airport compensation, while new aircraft shortages are increasing lease and rehabilitation fees. Due to this changing landscape, Australian Qantas was forced to announce last week that its loss would be closed by the end of July after two decades of operations, Jet Star Asia, a subsidiary of intra -Asia.
Jet Star Asia said it has seen a “really high cost increase” at its Singapore base, which includes fuel, airport fees, ground handling and double digit increase in security charges.
“This is a very thin buffer, and with the margin, any price increase can affect the airline’s process,” said Sheldon, Vice President of IATA Asia Pacific, “said Sheldon, Vice President of IATA Asia Pacific, Sheldon.
Aviation data firm OAG said in a February white paper that Asia Pacific is the most competitive aviation market in the world, in which the aircraft “may have reached the point where profit is compromised” by expanding capacity.
The report states that “balancing demand and tax costs has never been too critical.”
‘Go big or go home’
International budget flights in Southeast Asia have extraordinary concentrations. The Capa Center for Aviation data shows that about one -third of the international seats globally, this year, almost two -thirds of the two -thirds of international seats within Southeast Asia was on budget career.
Analysts say Kantas took the Jet Star Asia aircraft to run more costs rather than losing money rather than losing money in Australia and New Zealand.
Asia -based independent aviation analyst Brendon Sobi said budget operators in Southeast Asia were struggling for profit during severe competition before pandemic diseases, and now there is an additional element of more costs.
Low -cost carrier operating costs offers deals fares by minimizing. A large fleet scale of a plane drive utility.
Jet Star Asia was much smaller than local rivals with only 13 aircraft. As of March 31, Singapore Airlines had 53 aircraft in the Budget of Shot Scott, Air Asia had 225 and Vietnam Jet had 117, including its Thai arm. The low -cost Philippine carrier Sibo Pacific had 99.
All four are adding more aircraft to their fleet this year and in the future. Vietjit signed a temporary agreement to buy 150 more single oil airbus aircraft in Paris Air Shu on Tuesday, saying the move said that the airline was pursuing prominence development.
The agreement continues with a magnificent order for 200 Boeing Max Jets, following the order of 20 A330neo wide physical aircraft. Air Asia, which has an existing order book of at least 350 aircraft, is also talking to buy 50 to 70 long distances of single oil jet liners, and 100 regional jets, which can allow it to spread to more destinations, CEO Tony Fernandes said on Wednesday. “At the end of that day, it is in large numbers.
