ME budget carriers post solid H1 growth
Dubai, November 19, 2013
The low-cost carriers (LCCs) in the Middle East region have registered solid growth in the first half with an overall increase in seat capacity from 11.5 million last year to 13.5 million in 2013, according to a new study.
The regional budget carriers were showing significant confidence in their potential for growth, having witnessed an overall increase in seat capacity, stated the analysis from Amadeus’ Air Traffic solution.
The company is part of Amadeus’ travel intelligence portfolio of solutions. Based on capacity and other data sources, Amadeus Air Traffic can calculate estimates for total air passenger volume for any Origin and Destination worldwide, including those dominated by low-cost carriers.
These findings further highlight that globally, LCCs have seen an overall increase in seat capacity of 6.8 per cent in 2013. The analysis also paints a picture of strong capacity growth in Asia and modest increases across Europe and North America.
On Asian scene, the report said that the budget carriers in Indonesia were witnessing a robust growth in seat capacity (up by 12.3 million seats), India (capacity up by 3 million seats), Thailand (up by 2 million seats) and Malaysia (up by 1.8 million) and were responsible for half of the total global LCC capacity growth.
Asia showed the strongest growth rates with a 28 per cent overall increase to reach 129 million departing LCC seats in the first six months of 2013. When capital cities are examined, it is evident that capacity increases are being driven by emerging Asian nations.
Jakarta saw the strongest absolute LCC capacity growth of any capital, increasing by 2.8 million seats or 44 per cent, closely followed by Bangkok, up 1.2 million seats or 30 per cent.
In addition, the heavily developed Tokyo market also saw a significant increase in LCC seat capacity, which suggests the traditional focus on full service, could be changing.
Europe: A divided landscape
Europe’s 0.8 per cent overall LCC capacity growth masks a far more complex picture: across much of Southern Europe, the budget carriers have reduced capacity, with Madrid seeing a fall in the LCC departing seat capacity of 27 per cent, the highest of any capital city in the region.
Athens and Rome also saw significant percentage decreases. This picture contrasts sharply with the situation in much of Eastern and Northern Europe where Warsaw witnessed an enormous jump in LCC capacity, up 63 per cent year-on-year and now representing 27 per cent of total departing capacity from the city. Istanbul and Copenhagen also saw LCC capacity increase sharply.
Three European capital cities experiencing greatest LCC capacity reduction, said the report.
According to the Amadeus’ analysis, London maintains its position as the world’s leading city for the budget carriers.
On a global basis, London’s LCC seat capacity is by far the largest of any city with nearly 15 million available LCC seats. That is roughly 1.5 times the number of available seats at the next largest LCC city, Sao Paulo.
However, the rates of growth occurring at Jakarta (44 per cent) and Kuala Lumpur (15 per cent) suggest the third and fourth placed cities may move up the top ten ranking over coming years.
Alexandre Jorre, LCC specialist, Amadeus, said: "We see a natural boom in LCC capacity across Asia, where point-to-point air travel is largely underserved. However, across the mature markets of Europe and North America capacity is constrained, which may explain why some LCCs are considering new approaches to secure future growth."
He pointed out that with a 25 per cent year on year rise over the first half, LCC bookings in Amadeus were growing significantly.
"LCCs are seizing the opportunity we offer to penetrate the high-yield business travel market and expand into new regions where they have limited brand presence. To maximize these benefits, we keep innovating, as demonstrated by the new range of light ticketing enhancements just implemented for easyJet, which keep it simple for LCCs and make it far more efficient for agents to book and service LCCs," Jorre stated.
Pascal Clement, the head of Travel Intelligence, Amadeus, said: “Understanding how capacity trends are changing at a detailed level is fundamental to the planning process for both airlines and airports. Deploying effective data analysis tools that can seek meaning among huge volumes of data can give companies the edge.”-TradeArabia News Service
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