Report shines light on Asia Pacific LCC trend

10th Aug 2007

UNWTO is publishing an annual report on the
Mega-Trends of Tourism in Asia and the Pacific, in collaboration with The Hong Kong
Polytechnic University.This special report on Development of Low-Cost
Carriers in Asia and the Pacific is published as part of the Mega-Trends Study
Series with an aim to address the evolving development of Low-Cost Carriers in the

“The concept of Low-Cost Carriers (LCCs) first appeared in the US almost 30 years
ago,” as Mr Franc
esco Frangialli, Secretary General of UNWTO, remarked, “but it has not become
noticeable in Asia and the Pacific region until 2002.” The major catalysts of the
spread of LCCs in the Asia-Pacific are the deregulation of aviation industry,
government support, burgeoning economic development, increasing number of middle
class (especially in China and India) with greater disposable income, greater demand
for short-break holidays, easy access to the Internet in major cities, and the
privatisation of airports.

Impediments to the development of LCCs may indeed deter the intra-subregional open
sky policy to be materialized, however, the development of LCCs is still being
perceived as one of the most prevailing trends in tourism. The phenomenon of LCCs is
resulting in significant impact on the tourism industry, particularly affecting the
travel pattern of the tourists and the business model of the airlines. It is
encouraging to note that India will become the world’s largest LCC market wit
h a market penetration reaching 70% by 2010. China is certainly another market which
has a huge potential.

Prof Kaye Chon, Chair Professor and Director of PolyU’s School of Hotel and Tourism
Management, summed up: “This report confirms the findings in the Mega-Trends annual
report that LCCs are picking up momentum in the Asia-Pacific regions. These have
helped make the travel market more competitive. Through closer cooperation with host
destinations in terms of managing the carrying capacity to achieve sustainable
development and promote healthy competition, LCCs can help with the re-allocation of
scarce economic resources in order to achieve higher efficiency in the airline


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