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Tourism
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2003-12-10 23:02:06-05
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New Budget Airlines bring New Critics
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New trend in Asia puts a new face on Asian air travel, but is it a fad?
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There?s no doubt that the plethora of new budget airlines that have surfaced throughout the Asian region this year signals that most of the region has finally shed the stigma of the 1997-98 financial crisis. What the new airlines are saying is, ?the economy is fine, we have a lot of travelers and now we want more parts of the society using low-cost airfare.? Here?s an overview of the new low-cost entrants. Singapore Air is teaming up with the founder of Europe?s Ryan air yo form Tiger Air. Australia?s Qantas says it will deliver discount air next year with Jetstar next year, AirAsia of Malaysia has been successful and it is teaming up with the company owned by the Thai Prime Minister?s family-owned business, Shin Corp, to enter Thailand. This month Orient Thai started a low-cost service from Bangkok to Chiang Mai and Thai International Air ways plans to start a new bare bones service during the first quarter of next year. Former executives with Singapore Air plan to start ValuAir and Indonesia has two carriers, Lion Air and Air Paradise. Although the Asian airline industry remains highly regulated due to the neo-socialist leaning of many of the regions governments, most of them are getting behind the new airlines and in the case of Thailand?s Prime Minister Thaksin Shinawatra getting involved with the industry. It?s politically popular to offer customers a chance to fly more readily within a country. However, most analysts don?t believe a low-cost Pan-Asia carrier will emerge as costs enter into the equation. Most observers believe that the carriers are already under profit-cost pressure due to the low fare structure. The challenge is whether Tiger Airwas and ValuAir can succeed in building business in an expensive hub such as Singapore as well as compete with rivals operating in Indonesia, Thailand and Malaysia, where costs are less.
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