Phuket crash casts sobering light on low cost growth
It only takes one accident to taint what to date has been one of Asia’s biggest success stories – the emergence of low cost airlines and how they have transformed the travel and tourism landscape.
The Centre for Asia Pacific Aviation (CAPA) predicts that by 2012, budget airlines will account for 25% of all passenger traffic in the region.
Tiger Airways last week announced it carried 50% more people and increased its capacity by 35% between April and June this year. AirAsia has said it will carry 18 million passengers this year.
Abacus International predicts that Vietnam could be the next travel tiger in South-east Asia, growth that will be fuelled by low cost airlines in large part. AirAsia has set up a Vietnamese subsidiary.
What the tragic One-Two-Go crash in Phuket will undoubtedly do, for the immediate, is put this growth in a more sobering light – is it growth at any costs and are there enough regulations in place to ensure this growth is sustainable and safe from the consumer’s perspective?
While one could argue that any air crash begs these questions to be asked, the thing is, this accident took place at a time when low cost airlines are being cited as one of the key drivers for growth in the region.
While the official reason for the crash is as yet undetermined and pending investigation, the Web is alive with chatter and speculation. Questions such as what does this mean to the reputation of all low cost airlines or does low cost mean low cost at any cost will be asked, and every low cost airline needs to be prepared with answers.
In www.crikey.com.au, an Australian website, Ben Sandilands, puts it in perspective: “There will also be claims made about the safety of “budget” carriers in general when the issue is really the safety of One-Two-Go, which has six aged 747s flying regional international routes under the “Orient Thai” banner, and is now down to six primarily domestic MD-82s.”
The International Herald Tribune links the story to a report that Orient Thai airlines, the operators of One-Two-Go, was warned about its safety procedures last year.
The airline was issued a warning in March 2006 by the South Korean Ministry of Construction and Transportation (along with two other low-fare carriers, according to the IHT report) for “frequent delays and sub-standard safety measures”.
Founder and CEO of Orient Thai, Udom Tantiprasongchai, who appeared on television immediately to express his regret over the accident, set up One-Two-Go three years ago amid the boom in low cost airlines.
A report in The Nation says it was the first local low cost airline, starting ahead of Thai Air Asia. “However, it has not been as successful as Thai AirAsia,” said the newspaper.
It concluded, “It is too early to say how Udom might want to restructure his OneToGo airline after the Phuket tragedy. To restore its name, the airline needs to disclose all the facts behind the crash and assure further safety measures.”
One could go further to say it needs to do so to protect the reputation of the entire low cost airline sector.
Corinne Wan
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