A low-cost
carrier is an airline that offers generally low fares in
exchange for eliminating many traditional passenger services.
The concept originated in the United States before
spreading to Europe in the early 1990s and subsequently to
much of the rest of the world. The term originated within
the airline industry referring to airlines with a lower
operating cost structure than their competitors. Through
popular media the term has since come to define any carrier
with low ticket prices and limited services regardless of
their operating costs.
On May 5, 2004, Singapore's first low-cost carrier, Valuair
was launched, prompting dominant carrier Singapore
Airlines to invest in a new low-cost startup, Tiger Airways,
to beat the competition. Not to be outdone, Singapore Changi
Airport's second most dominant carrier, Qantas Airways, also
started its Asian offshoot, Jetstar Asia Airways based in
Singapore and commencing operations on December 13, 2004.
Malaysia's AirAsia made repeated attempts to set up a
Singaporean operation, but its insistence in using Seletar
Airport, in addition to other demands to cut airport usage
charges, delayed its abilities in gaining the relevant permits
from the authorities in Singapore. This set-back may block
AirAsia's Singapore expansion ambitions. In July 2005, the
owners of Jetstar Asia took over Valuair and are merging the
two carriers. In contrast with AirAsia, none of the
Singaporean low-cost carriers are yet profitable.
A recent trend is the formation of new low-cost carriers
exclusively targeting the long-haul business market, with
aircraft configured for a single class of service, initially
on transatlantic routings. Probably best described as "less
frills" rather than "no frills", the initial entrants in this
market, including Eos Airlines, Maxjet Airways, and Silverjet
are using mid-sized twin jets such as Boeing 757 and Boeing
767 to service the lucrative London - US Eastern Seaboard
market. |
