Low-cost carriers in Asia: Deregulation, regional liberalization and secondary airports

While the demand for low-cost air transportation is potentially huge in Asia, development of low-cost carriers (LCCs) lags behind the region's overall aviation development, and certainly lags behind the LCC development in North America and Europe. It has been noted that market conditions and the regulatory environment of Asia are different from those of North America and Europe. What are the main differences here; and how do these differences impact market entry and success of Asian LCCs? This paper describes salient features of Asian LCCs and their developments. It examines the impact of Asia's domestic and international airline regulations and airport infrastructure on the performance of its LCCs. We find that the “Southwest effect” may also exist in Asia and that the development of low-cost terminals may compensate, at least partly, the scarcity of secondary airports in the region. The experiences of Thailand and China are investigated as case studies.