Introduction Our group had chosen the topic on "Impact of Budget Airlines on the Asian tourism Industry". The keywords variation discussed as follow:
The search phrases that we had used are:
- Budget airlines
- Asian Tourism Board
- News articles on budget airlines
- Development of budget airlines
- Impact on tourism
The impact of budget airlines on the Asian tourism industryThe keywords used for this topic are: "impact of budget airlines on Asian tourism industry" and "budget airlines".
Two relevant resources found are:
1)
http://www.taipeitimes.com/News/biz/archives/2005/03/15/20032463752)
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_3e2cad2a-cb73c03a-39060b00-cea8411fBoth websites found has indications of budget airlines boosting the economies and tourism industry of various countries. In the first source, it has evidences of low-fare carriers accounted for 7 percent of 3700 weekly flights at Changi Airport in 2004, helping Singapore Tourism Board (STB) to reinforce the city-state’s position as a gateway for intra-regional travel. Budget airlines are also plying on popular routes for the need of recognition by the low-budget contenders and then to prime for an IPO, which helps cash flow on getting new aircraft and planning new routes. Some of the budget airlines plying on Bangkok-Singapore route and Singapore-Hong Kong route are, Thai Air Asia, ValuAir and Tiger. However, with the low cost in air catastrophes, international tourists in many markets are still in doubt of the safety records.
As for the second source, the article states the changes in the region’s tourism industry in just four years. Budget airlines in Asia have changed travel patterns, with growth on passengers. More than 13% of all flights in and out of Changi Airport are now operated by low-cost carriers, compared with 9.5% two years ago, according to a spokesperson from the Civil Aviation Authority of Singapore. Two of the low-cost carriers, Tiger Airways’ and AirAsia indicated that sovereign air rights and fragmented air space in Asia has forced them to establish secondary bases and pursue joint-venture strategies. Despite with the right demographics, development of secondary airports and willingness of governments to liberalize routes for the growth of low-cost carriers with rising incomes in Asia, even the no-frills carriers face problems from bilateral air traffic agreements to keep fares at low price and low operating costs. With the rising cost of jet fuel, costly aircraft and shortage of professional pilots in the region has drives up staff costs and a higher cost for budget airlines to keep airborne.
Though there are rising expenses needed, I feels that budget airline will continue to prosper in aspect to the support received from low-budget tourists, and the new routes and destinations created to attract more tourism.
Sophia Topic: Discuss the impact of budget airlines on the Asian tourism industry.
The keywords that I used are: impact of budget airlines & asian tourism industry.
The two resources which I have found useful are:
1)
http://www.the-infoshop.com/study/mks31349--low-cost-airlines.html2)
http://www.bizasia.com/tourism_/ibkz3/new_budget_airlines_bring_new.htmBesides that, i also decided to analyse this page as i find the forum very interesting indeed.
All these while, I thought many people are very satisfied and happy with the presence of budget airlines. I thought they are happy with the low cost and also the services provided by the airlines. However, after doing much research, i realised that majority people are unsatisfied with the services and basically, the whole idea of the budget airline.
The first webpage that i came upon, writes a report on how the asian pacific industry is making a change throughout the market. The report also mentioned that the industry grew by only a small percentage which is close to invisible.
On the other hand, the second webpage, it shows how the budget airlines has invited much critics from the public. Althought most parties are stating that budget airlines has been giving a good sign to some people. On contrary, the news also stated that most observers believe that budget airlines are already facing under-profit cost pressure due to the low cost fare structure.
In addition, the extra website that i came upon is very useful and interesting as a lot of people expressed their views and opinions on this topic. Most people are very unhappy with the services and the low cost idea because they have their own experiences and ideas on this budget airlines.
Overall, i think that budget airlines are still not as popular to the public and it has not made any major impacts on the asian tourism industry. Maybe, a slight change .. but not a major change, yet.
By Ramizah.
Impacts of the Budget Airlines in Asian tourism industryAsia's budget airlines are poised for huge growth, despite recent damaging crashes, as cheap fares and new planes lure millions of passengers who have more money to spend on travel and leisure. Budget flights have proliferated in the region, following a similar trend in the United States and Europe, as firms such as Malaysia's AirAsia, Australia's Virgin Blue and Singapore's Tiger Airways aim to tap Asia's growing wealth.
Passenger traffic in Asia-Pacific climbed over 6 percent this year to July, with the region now accounting for 32 percent of the global market, according to industry body IATA.
In Asia, as elsewhere, the entry of low-cost airlines is eroding market share for traditional carriers and forcing them to reassess their business models. New entrants and spin-offs alike need to compete based on known success factors such as:
• Innovative customer experience
• Balanced growth
• Simplicity and efficiency from route structure to fare structure
• Effective governance
Meanwhile, macroeconomic and geopolitical dynamics have increased revenue variability and overall uncertainty. In this environment, three new imperatives for incumbent competitors emerge:
• Refine the core value proposition
• Achieve a greater variable cost component
• Improve infrastructure responsiveness
Carriers who accomplish these imperatives can stay competitive and win at the airline margin game.
However, there are plenty of strains on budget airlines and perceptions of poor service may still put off some customers. The expansion of low-cost carriers and the boom in travel in India and China create other worrying trends. They have sparked a severe pilot shortage in Asia, which may hurt safety as more inexperienced men and women settle into the cockpit. Asian governments are allowing businessmen to start airlines without enough capital on hand with may increase incidents rating. For instance, before taking off for Britain in 2005, passengers reportedly saw fuel leaking out of a Phuket Air plane and refused to fly on it. In 2006 Phuket Air was banned from flying into the European Union.
Sock Leng Impact of Budget Airlines on Asian tourism Industry The two resources that I had used are:
The introduction of budget airlines in Asia Tourism Industry had brought about an increase in the number of tourists as now; more people are able to travel at a more affordable price. As a result, the well established national carriers that have enjoyed near – monopolies for many years are being challenged. Due to the decrease in price of budget airlines, some national carriers are reducing their price in order to cope with the challenges that they are facing at that point of time. For instance, Singapore Airlines’ regional carrier, SilkAir, used to charge $400 for a round trip from Phnom Penh. However, with the arrival of Jet Star Asia’s service, it caused SilkAir to cut its prices in half. Whereas for return from Phom Penh on budget airlines, prices go as low as $41, including taxes. In addition, with more people entering into the countries, there is a need to increases it services within the countries. InterContinental Hotels Group sees the need to expand its midmarket brands to atrract more tourist.
With more people coming in, a country can benefit as more money is injected into the economy of the money as people will spend on things like accommodation, entertainment and souvenirs in the country. If tourism industry is the top contribution to the country, the increased competition with the introduction of budget airlines will have come at the exactly the right time to boost the economy of the country. Hence, more and more countries are welcoming the changes. As a prospering economy will in turn attract investors to invest in the countries as the possible chances of profit is higher. In addition, government will improve on their infrastructure in order to make the country more accessible and attractive to the people.
Although prices to travel in budget airlines are cheaper as compared to national carriers, passengers still have to pay usual charges and taxes.
Hui YingMy 1st resource :
http://www.iht.com/articles/2007/12/27/business/air.php?page=1 This article starts off talks about an incident in Phuket from One-Two-Go Airlines, one of the low cost airlines in Thailand. Some regulators also label the low cost carrier with poor safety measures and doubt to trust their lives on the carrier. Low cost airlines had been increasing in the last few years due to growing middle classes is unable to afford the full fare of the airlines and prefer the cheaper carrier. Governments are also willing to expand the carriers, where it is like opening the door for the low cost airlines industry. One budget airlines in Singapore, Tiger Airways are even branching out to other countries such as Australia. Through the introduction of budget airlines in Asia-Pacific region, it had made it more affordable that will benefits the travellers. Thus, it increase the traffic and the growth of the low cost flights in Asia had also leap from 3900 to 60000 six years ago. On the other hand, although it may be seems to be a good thing, regulators have a different way of thinking. They are concerned that the industry might be growing too rapidly and might pose some threats. They believed the young fleets are making use of the old carriers by acquiring them. Also, due to labour shortage, inexperienced personnel might be involved in the pilot shortage which will cause worrying safety trends. Furthermore, Asian government will tend to lesson on the regulations imposed to the starting up airlines without sufficient capital. It also indicates some incidents where deregulation had made the safety records bad by some low-cost airlines in Indonesia.
In conclusion, Low cost airlines (budget airlines) had been developing rapidly in recent years due to more affordable rates to the middle classes. Safety concerns are the main issues of regulators who believed that the industry is booming too quickly. Safety threats arising from employing inexperienced staff and deregulation that allows starting up without enough capital which will likely to impose weaken safety standards.
This article published at International Herald Trubune. It is owned by The New York Times Company which is one of the leading media company. The site is well maintained and news is always up to date. Relevant links are also indicated for reader convenience. It also contains figures from the international flight information company OAG and other comments made from industry analyst and regulators. Thus, it did not just provide substantial breadth and depth of the coverage, but also clear, current and accurate information to the readers.
My 2nd resource:
http://www.findbestairline.com/Asia-Airlines/This resource mainly talks about only 1 impact of the budget airlines in Asian industry. Although the introduction of budget airlines had increase the number of travels, the price of the airlines had drop until a rate where everyone is affordable. This had led to established airlines had difficulties coping with the financial trends. Furthermore, new entrants into the industry also inflict salt into the pain by offering low cost airlines in order to take advantage of increase in foreign travel.
The source provides information that may be relevant and useful to my research but yet the reliability of the source is uncertain. This is mainly because the source is not recognized worldwide other than them. Moreover, it is not supported by reliable source or figures which might enhance the reliability of the source. Although information might be clear, relevant but it is not accurate and reliable for the readers and users.
My 3rd resource:
http://news.airwise.com/stories/2004/08/1092739644.htmlThis article is talking about the growth of budget airlines will boost the jet fuel demand in the next five years. As budget airlines offer more affordable rates to the middle classes and low income classes, thus the introduction of it had encourage more travel and thus leads to an increase of the jet fuel demand. Although currently the fuel consumption of the low cost carrier is low, analysts and other sources had forecasted that the industry will grow and take up 10 to 20 percent of the fuel demand of the region.
This article is published at Airwise. The reputation of the website is not well-known and not recognized worldwide. However, it had incorporated with Reuters. Reuters is well-known for the world’s largest international multimedia news agency and information from Reuters are trusted and have a reputation for speed, accuracy and freedom from bias. As the information source came from Reuters, thus the information is reliable and accurate. Furthermore, the information of the article is also supported by comments from analysts at DBS Vickers and UBS. Relevant links are indicated for readers’ convenience. In addition, the site is also free from grammatical, spelling and typographical error. Thus, the site would be reliable and information from the site are clear, accurate and correct to the readers.
The reason for posting for the 3rd resource is mainly because the 2nd resource that i had indicated are not quite useful and reliable after evaluating the site using the evaluation criteria. Therefore, the 3rd resource will replace 2nd resource.
Wei BaoConclusion In conclusion, there are different impacts from different perspectives. The introduction of budget airlines has caused great competition among other airlines. As a result, some airlines drop its prices to a more affordable prices. This in turn lead to more people travelling around as the price is more reasonable now. As a result of the growth of budget airlines, jet fuel is deemed to increase due to the increase of travelling. Furthermore, due to the increase in travelling, tourist spending had boost the country economy.
However, safety issues are the main concern of consumers as they fear that low cost flight might hold their life at risk, which may hinder the prospect of budget airlines. In addition, company might lower down their services standards in order to reduce the cost needed.
Overall, budget airlines is still believed to be attractive to the public as most of them are taking advantage of the cheap price and convenience to travel.
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With low – cost airlines on the rise, hotel opportunities soar. Retrieved January 5, 2008 from World Wide Web: http://www.hotelsmag.com/archives/2004/10/gu-low-cost-airlines-opportunities.asp
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