PhoCusWright predicts further market shares’ gain for low cost carriers in Asia

16 Sep 2013  2055 | World Travel News

BANGKOK- According to a new PhoCusWright Global and Asia Pacific Edition report, traditional carriers are scrambling to drive direct online sales and unbundling services to boost profitability as LCCs chip away at their hold on the region's air segment.

Network carriers, which dominate APAC's airline landscape, will capture nearly 85% of air bookings in 2013, according to PhoCusWright's Asia Pacific Online Travel Overview Sixth Edition Airlines: Flights of Contrast. However, LCCs are growing almost three times faster than their legacy counterparts, with gross bookings projected to jump 17%, versus just 6% for traditional airlines.

"Low-cost carriers have proven to be an extremely disruptive force in APAC's air market, but their success is really a net positive for the segment," says PhoCusWright research analyst Chetan Kapoor. "The ascent of LCCs is growing the overall population of air travelers, driving online air bookings and, ultimately, spurring innovation among network carriers."

LCCs have achieved significant scale in online distribution by primarily restricting distribution to their own websites and prioritizing other channels by cost. As a result, nearly two thirds of APAC LCC bookings will be transacted online by 2015, versus roughly one third for traditional carriers. As traditional airlines more aggressively pursue online distribution, however, competition between LCCs and network players will intensify.

PhoCusWright's Asia Pacific Online Travel Overview launched its sixth Edition Airlines: Flights of Contrast. The report provides detailed market sizing and projections, with insight into airline gross bookings and growth rates in China, Japan, Australia-New Zealand (ANZ), India, Southeast Asia and Northeast Asia.

Sourced: TravelDailyNews

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