How Do You Think the Asian Passenger Air Transport...

The Asian passenger air transport marketplace will stable and growing rapidly. The latest Airbus Global Market Forecast (GMF), released in December 2010, shows that key drivers for the marketplace are the replacement of aircraft for newer more eco-efficient models in mature markets, dynamic growth in new emerging markets, the further growth of low-cost carriers – particularly in Asia-Pacific and Europe, further market liberalisation and capacity growth on existing routes. In 2010, views on whether low-fare airlines would continue to flourish in Asia varied. Three factors regulation, population demographics, and socioeconomic trends -drove this calculus. Although the target consumer base for AirAsia was enormous -more than 500 million†¦show more content†¦Surcharges and baggage fees covered some of this but the airline was conscious that if it loaded on the full charge, it might find no demand on some flights due to a high base price (e.g. minimum or zero fare plus taxes, fees and surcharges). To offset this eventuality, AirAsia did a lot to improve operations and efficiency and also saw the benefits of the fuel efficient Airbus 320 help to maintain its low-fares brand position. To retain its cost advantage in the wake of the global recession, AirAsia entered into an alliance in January 2010 with Jetstar, the low-fare subsidiary of Australia s flag carrier, Qantas. This was the first time two leading budget airlines had collaborated in this fashion. The alliance allowed the companies to explore joint aircraft purchasing, passenger and ground handling services cooperation and the transportation of each other s passengers in the event of a disruption. Assuming the focus of the alliance was on cost sharing for services and aircraft procurement, it might prove effective. AirAsia had played the game very well and had ambitious growth plans to keep ahead of the pack. Time would tell if Fernandes and his team could maintain the company s position as Asia s -or perhaps the globe s -most successful budget airline. But what were the business implications for AirAsia if oil prices remained above $100 a barrel for the foreseeable future? Little possibility. Between slim and none The pattern in other regionsShow MoreRelatedThe Ascendance of Airasia Essay1092 Words   |  5 Pages 1. What is the macro and industry environment for new budget airlines in the Asia- Pacific region? 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