Tuesday, October 7, 2008

Jetset: "High Anxiety Over Low-Cost Carriers"

The recent deadly accident in Phuket involving Thailand’s One-Two-Go budget airline has raised a pressing question: In the age of dramatic expansion of air travel in Asia, how safe is it to fly the region’s growing number of low-cost carriers (LCCs)?

The advice from aviation experts is simple: Pay attention to the airline’s past safety record and the age of its planes. Since a plane only makes money when it’s carrying passengers, LCCs try to maximize their aircraft utilization by keeping the planes in the air as long as possible every day. This practice requires top-notch maintenance – and therein lies the Achilles’ heel for some Asian LCCs.

Amid all the boom, experts say some carriers have had trouble finding qualified pilots and mechanics, while some governments have been unable to cope with their increased role in overseeing the industry. Indonesia, for instance, has witnessed several fatal accidents involving its LCCs in recent years. A word of caution on aircraft age: Properly maintained planes can fly safely for decades; DC-9s, which haven’t been built since 1982, remain the workhorse for US-based Northwest Airlines. So don’t jump to quick conclusions.

It also helps to look at the anatomy of LCCs before you make a decision to fly them or not. LCCs can offer amazing deals because they cut their operational costs by simplifying fleet and fare structures, as well as eliminating traditional services. When you buy a ticket, a seat on the plane is all you’ve got. Everything else – from checked-in bags to food and beverages – will set you back extra.

The birth of Chinese LCCs has been difficult. Several new private airlines that aspired to become LCCs had to give up the idea after running into regulatory obstacles. The government still sets airfares and has the final say on everything, ranging from route authority and airport landing fees to jet fuel prices, so airlines find almost 80 percent of their operational costs are “fixed.”

The one domestic LCC that has survived and thrived is Shanghai-based Spring Airlines. It now flies to a few dozen destinations across China with six single-class Airbus 320s – and has been profitable since its launch in 2005.

Growing pains continue for Spring, however. Fliers still complain bitterly about the lack of “freebies” while local governments remain hostile. When Spring offered RMB 1 tickets on its new route to Jinan, instead of being applauded, it was fined for breaking with the official price structure.

Although it hopes to become China’s Southwest Airlines (the US-based LCC pioneer), Spring may want to think twice before copying some of the latest customer-unfriendly moves by Western LCCs. Ryanair recently announced it would charge passengers for checking in at the airport (instead of online). Now that’s just a step too far… my question is: Can onboard coin-operated lavatories be far ahead? Steven Jiang

This article was originally published on page 32 of the November 2007 issue of That's Beijing magazine.

No comments: