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April 14, 2022

LCCs have played a significant role in Asia’s tourism industry growth

Improving the awareness of cheaper air travel fares to the world’s most populous continent was a major challenge.

By Globaldata Travel and Tourism

Increasing numbers of LCCs (Low-Cost Carriers) have helped drive increasing numbers of Asian airline passengers, with the middle class a major contributor to increased air travel.

LCCs provide a significant economic advantage for Asian countries since it positively impacts multiple sectors in addition to the aviation industry, such as overall employment, GDP, trade, tourism, and productivity.

Improved airline infrastructure and promotion across Asia

Improving the awareness of cheaper air travel fares to the world’s most populous continent was a major challenge. LCCs have been successful in reaching out to a growing middle class by using digital marketing and other marketing techniques like SEO (Search Engine Optimization) and online adverts.  Airline discounts and rewards programs have also attracted a lot of customers, especially in domestic tourism.

Infrastructure and deregulation have also had a considerable impact on the Asian LCC market. Many countries such as China, India, Malaysia and the Philippines, have been proactive in matching infrastructure demands through the easing of regulations and development of more regional airports. This strategy has proven successful in helping Asia’s LCC market. As per GlobalData’s Market Competitor Insights Database, the number of LCC seats sold increased by 279% from 2009 to 2019 across China, India, Malaysia and Philippines, contributing to a 225% rise in domestic and outbound trips within these countries. Naturally, the pandemic impacted these figures throughout 2020 and 2021. However, the economic strains may actually accelerate demand for LCCs in the long term.

A proven business model which meets market demand for low fares

While many travellers have complained about the decline in quality of service within aviation, the number of complaints was not unusually high in comparison to the larger number of air travellers. This was due to the fact that, after accounting for inflation, airfares fell significantly. Customers have often understood that they get what they pay for. According to GlobalData’s Q3 2021 Global Consumer Survey, when asked “Which factors help you decide where to go on holiday “an average of 62% consumers from China, India, Malaysia and Philippines agreed that they consider “Affordability”, which is in favour of LCCs.

LCCs in Asia offer significant airfare discounts due to their higher efficiency and better fleet utilisation. Furthermore, their adoption of ticketless travel and online presence allow them to reach a growing number of online users across Asia. This type of business model has long been successful in North America and Europe, creating household names within the aviation sector such as Southwest Airlines, Ryanair and easyJet. Moving forwards LCCs in Asia will play a significant role in the tourism industry’s recovery on the continent, building on strong initial growth before the pandemic.

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