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Karamjit Kaur
Thu, May 08, 2008
The Straits Times
Budget airline war spawns new hybrid carriers

PLANNING a flight on a budget airline soon?

If you are, it might do you some good to shop around - you might score a really good deal: A flight that offers some of the comforts of a regular airline, such as an assigned seat and meals, for the price of a budget air ticket.

The highly competitive budget airline market has sparked a transformation in the industry.

According to a recent survey carried out by an airline consultancy, many budget carriers - six in 10 - have reinvented themselves as 'hybrids' which offer some of the services of regular carriers.

The consultancy, United States-based Sabre Airline Solutions, surveyed 123 low-cost carriers worldwide. It found that many of the 'hybrids' offer, among other things, connecting flights and ticket sales via travel agents, instead of flying point to point and distributing tickets themselves - usually online - which is what typical budget carriers do.

Among the carriers operating here, Jetstar Asia falls under the 'hybrid' category.

For example, it gives every passenger an assigned seat at the time of booking or when checking in, and operates out of Changi Airport's Terminal 1, instead of the Budget Terminal.

Traditionally, seating on budget airlines is on a first-come-first-served basis so those who turn up early at the passenger waiting rooms get to board first.

Malaysia's AirAsiaX - associated with AirAsia, which pioneered budget flying in Asia - is also evolving. It is readying itself to offer long-haul flights out of Kuala Lumpur to Europe and Australia, among other destinations.

This is something true-blue budget airlines do not do. Instead, they offer short flights and quick turnarounds - getting in and out of an airport as quickly as possible - to maximise aircraft usage and boost passenger numbers.

This allows them to offer fares that, on average, are less than half those of full-service airlines.

Explaining the 'hybrid carrier' trend, Sabre's vice-president (airline marketing and strategy), Mr Gordon Locke, told The Straits Times: 'The low-cost carrier market is one of the most competitive in the airline industry, and this has spurred many pure low-cost carriers to explore new ways of evolving their business to remain competitive and sustainable.'

For many of the airlines, the move is also 'to make a play for the highly lucrative business traveller, who has a completely different set of needs and shopping behaviours from the leisure traveller that low-cost carriers have traditionally targeted', he added.

Apart from Jetstar Asia and AirAsia, other 'hybrid carriers' include industry leaders Southwest and JetBlue in the United States.

Those who have stuck to their budget guns include Europe's Ryanair and Singapore's Tiger Airways.

This article was first published in The Straits Times on May 6, 2008

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