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LCCs in the region must adopt a local approach: airline execs
Renuka Vijay Kumar, reporting from Routes Asia, Mumbai, March 19, 2013

ADAPTING an LCC to the local market is critical as a cookie-cutter approach would not work in Asia, agreed panellists at the Routes Asia Strategy Summit.


SpiceJet CEO, Neil Mills, said: “In Asia, the LCC model is very different from the traditional networks.”


The Indian LCC is 80 per cent identical to LCCs elsewhere, “but the last 20 per cent is catered to the local market”, he added.


“We serve hot food on board SpiceJet but would never dream of doing it elsewhere. Because in India, food is a very important part of the experience,” he explained.


Venggataro Niadu, head of network and fleet management, AirAsia X, said: “We will see not just LCCs moving towards the hybrid model but also other full-service airlines (doing the same).”


He further predicted that with rising costs, cost per seat for both LCCs and legacy carriers would increase. The margin would still remain significant and that was when customers will turn to LCCs, he said.


The idea of collaboration among LCCs was also mooted. Giorgio De Roni, CEO, GoAir, suggested that LCCs work towards bundling services such as using common airport security and luggage handling systems. He added that GoAir was in discussions with airport regulators to facilitate these processes.

“There can be value in low-cost alliances, but most of the time, ego gets in the way of business,” said Mills.


Meanwhile, both Mills and De Roni said they saw no threat from the upcoming AirAsia India venture, and were confident about their products, value offerings and expect continued business from the regions their airlines cater to.

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