How low-cost carriers are changing the growing East Asian travel market

Abstract

The Asian air travel market is currently one of the fastest growing in the world. The gross domestic travel percentage grew 4% year over year in 2014, with China, India, and Indonesia each growing over 10%. With a continually expanding middle class, India and China are expected to have the highest growth rate potential, due to the high investment in infrastructure and loosening travel restrictions (Rauch, 2015). The Asian air travel market has high potential due to many policy changes, robust economic growth, and rising incomes. As the world’s most populous continent, the Asian sector remains a big player in the airline industry as well as in aviation investment. The introduction of low-cost carriers and ultra-low-cost carriers, in an effort to get more middle class and working class travelers to fly has changed the economic landscape of how airlines in the region operate. Since many airlines run global operations, competition is fierce, but many lucrative opportunities remain in the low-cost sector.