Influx of budget airlines likely to bring super-low fares for Australians flying to southeast Asia

AS many as 10 southeast Asian budget airlines could begin flying to Australia within three years, bringing with them super-low fares.

More budget carriers could join Scoot in offering cheap fares to southeast Asia. Picture:

AS many as 10 southeast Asian budget airlines could begin flying to Australia within the next three years, offering passengers the promise of more super-low fares.

A report from the Sydney based CAPA Centre for Aviation says the new entrants, along with continued expansion from the 20 carriers already operating scheduled flights between Australia and southeast Asia, will add extra seats to a market already swamped with capacity.

“Further reductions in fares will likely result, particularly as all but one of the potential new entrants are low-cost carriers,” the report says.

While a win for customers, this would put additional pressure on Australian airlines on the already competitive route.

“The new competition poses yet another new challenge for the Qantas Group, which is struggling to compete in the Australia-Asia market,” it says.

Qantas last Thursday announced a $252 million half-year loss along with plans to slash 5000 staff, several routes and sell or defer deliveries of 50 planes.

Asian airlines already account for almost 70 per cent of the Australia-southeast Asia aviation market, which could reach 500,000 weekly return seats by 2017.

Australia is currently serviced by Asian budget carriers Air Asia and Scoot, which regularly offer one-way fares from Australia’s east coast to their Kuala Lumpur and Singapore bases for as little as $200.

The report predicts the country is close to attracting another three by the end of this year alone.

Carriers in line to service Australia include Indonesian budget carrier Citilink, planned Thai budget airline NokScoot, and Malaysia’s Malindo Air.

The report says Vietnamese airline VietJet Air could serve Sydney from Ho Chi Minh City once it receives wide-body jets, while Philippines carrier Cebu Pacific could shake up a Manila-Sydney market dominated by Qantas and national carrier Philippine Airlines.

Of the ten budget airlines, five are from Indonesia, signalling the growing strength of the country’s burgeoning aviation market.

Pacific Aviation Consulting managing director Oliver Lamb said the concerted push by Asian budget carriers could coincide with the release of new longer-range, narrow-body aircraft by Airbus and Boeing.

He said it could offer the opportunity for Australians living in cities not currently served by Air Asia or Scoot to take advantage of super-low fares.

“If it opens other parts of Australia up to cheap flights, it’s a great thing,” Mr Lamb said.

However, safety concerns surrounding a number of the airlines could scare off travellers or prevent them from being granted rights to fly to Australia.

One of the airline’s predicted to begin Australian services — Indonesia’s Lion Air — has been banned from flying to the European Union because of its poor safety record.

Lion Air has been involved in a number of recent incidents, including one in April last year in which a Boeing 737 crashed into the water near Bali while attempting to land.