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LCCs in North Asia: Why take distribution to the next level?

Cyril Tetaz

Executive Vice President, Airlines, Asia Pacific, Amadeus

CAPA estimates that low-cost carriers account for 60% of airline seats in Southeast Asia. This figure is just 10% in neighbouring North Asia - well below global performance of 25%.

This gap was the focus of the CAPA LCCs in North Asia Summit, which sought to raise awareness and create conditions conducive for mutually beneficial relationships in North Asian aviation and beyond.

Day 1 of the summit not only provided a fantastic opportunity to speak alongside leading and innovative Japanese LCCs, such as Spring Airlines Japan, Peach and Vanilla Air, but gave valuable insight into their strategies, operations and vision.

Growth Potential

One thing is clear - huge growth potential awaits LCCs and hybrids in North Asia. The market has all of the ingredients for LCC growth:

  • It’s home to two of the world’s largest, most influential and dynamic domestic markets: China and Japan.
  • Traffic continues to grow in and out of the region at record levels.

But the region faces unique hurdles:

  • Strong, well established players
  • Competition with high speed rail, especially in Japan and a growing presence in China
  • Slot and pilot shortages

With over 80 LCC and hybrid carriers partnering with Amadeus today, and 50 LCCs on the recently acquired Navitaire system, we’re working closely with more and more LCC and hybrid carriers to help them secure future growth in a profitable way.

LCCs are moving beyond traditional distribution practices. They’re:

Becoming more international

by moving beyond home markets. We’ve seen this with carriers such as Norwegian and Vueling.

  • Connecting with industry partners

    via codeshare and interline agreements. 19% of LCC bookings in Amadeus are interline/codeshare today.

  • Targeting new customer groups

    like corporate travellers in the style of easyJet and Ryanair.

  • Expanding cross-country joint ventures

    as we’ve seen with Air Asia Group.

Why? Because we’re delivering real results for LCCs and hybrids.

What does that mean for LCCs in North Asia? We see opportunities in both expanding internationally, with connections to second tier and regional cities, and leveraging the inbound/cross country growth that we observe between China, Japan, Korea, and Taiwan.

Taking distribution to the next level will help LCCs in North Asia grasp the full potential of the market, and Amadeus is the right partner to help them get there.

Check out this infographic and video to see how we’re bringing value to LCCs and hybrids in Asia and around the world.


Tags

Asia Pacific, Events