Airport regulations are ‘archaic’ and ‘limiting’, said low-cost carrier (LCC) panelists at the CAPA Asia Aviation Summit 2015 in Singapore this week.
Speakers at the North Asian LCC panel slammed over-regulation, although where safety was concerned, regulation is both adequate and needed.
Part of the problem, said Tigerair Taiwan CEO Kwan Yue, is the lack of understanding of aviation operations. Taiwanese officials are currently reviewing flight time limitations in the context of labour law, a move he describes as outdated. “Regulators are not catching up to the things LCCs need.”
In order to compete with the 17 foreign LCCs operating in and out of Taiwan, Tigerair Taiwan has had to take giant strides forward; a “ten year leap” in Yue’s words.
Speakers at the CAPA Asia Aviation Summit 2015 (Image courtesy of CAPA)
Hong Kong Express CEO Andrew Cowen described how the duopoly of suppliers in many airports acts against the interests of the industry. “All our cost components are going down,” he added, “aside from airport suppliers.”
LCCs also have to contend with restrictions placed on them by refueling companies. In Japan, “old-style regulations” stipulate that refueling can only occur when passengers have all disembarked, putting LCCs with a turnaround time of 30 minutes in a rather tight situation.
Despite this, speakers said the north Asian LCC market has tremendous potential for growth, particularly in merchandising and ancillary services.
Jeju Air CEO Ken Choi said the Korean market has enthusiastically welcomed the as-you-prefer model of service. “Five years ago, ancillary services account for about 1 per cent of [our] revenue. This year, it is close to 7 per cent,” he said.
For others, staying ahead is about creating a niche. Japanese LCC Vanilla Air hones in the three most popular domestic and international destinations, servicing routes between Tokyo, Taipei, Hong Kong and Kaohsiung. President Tomonori Ishii said despite the limitations of operating only eight aircraft, the airline has been able to turn a profit.
Where you’re located matters, too. For Tigerair Taiwan, the addition of a seventh aircraft to its fleet after only 14 months of operating is proof of its “enormous potential,” according to Yue.
In the short-term, the airline is not looking to develop any new routes to China. Right now, the airline is capitalising on its geographical advantage between southeast and northeast Asia.
Feature image credit: iStock/Sitikka
