Southeast Asia has become the destination for several budget airlines, thanks to the success of AirAsia.
Low-cost airlines were taking the United States and Europe by storm in the late 1990s and early 2000s. However, airline analysts maintained that Asian markets were not ready for budget airlines, and would not be able to support them. The reason, they said, was that air travel was still considered a luxury in Asia, and people who could afford it expected to be pampered on board. They would not take kindly to "no frills" travel, which was the cornerstone of budget airlines. It was also said that, unlike in western countries, the market was not big enough to support multiple airlines, and that the national flag carriers were too powerful to allow anything to unsettle the status quo.
Therefore, in most Asian countries the national flag carriers dominated the aviation sector until the early 2000s. It was not for want of trial that budget airlines did not work in the region until then. In the 1990s, two budget carriers, Skymark Airlines and Air Do were set up in Japan. Although these airlines offered fares that were much lower than those of major airlines like Japan Airlines, All Nippon Airways and Japan Air System, the majors soon exercised their considerable clout to "out discount" them. Initial success quickly fizzed out for both the budget carriers, and they were forced into the red. Their failure only served to prove the analysts right. However, AirAsia Sdn Berhad (AirAsia), which was launched in late 2001, changed this situation forever.
What he saw at Luton impressed Fernandes so much that he decided to resign from his job and pursue his childhood dream of owning an airline. Fernandes was convinced that a low-cost airline like easyJet would do well in the Southeast Asian market. His reasoning was based on the fact that general income levels were lower in Asia than in western countries, and people often had to travel great distances to get to places. He understood that a budget airline would create a new market segment by targeting those sections of the population that would otherwise not have chosen to fly. |
