Matchmaking for further growth – what are LCCs looking for in establishing new bases?

While Low Cost Carrier (LCC) business models continue to adapt, one thing remains constant … the need to keep costs at their minimum. This is particularly true with regard to relationships with airports, where LCCs generally want to get aircraft down, turned around and back up into the air in the quickest possible time.

There’s been a surge in new airline-airport partnerships in recent times and this is particularly evident in the emerging North Asia market. South Korean LCCs are expanding beyond their primary bases, with t’way and Jin Air setting up additional bases in Daegu and Busan respectively. Meanwhile Japan’s secondary airports are aggressively targeting international flights, particularly South Korean LCCs, as well as LCCs (and full service airlines) from elsewhere in North Asia, including China.

Also, the new Hong Kong-Zhuhai-Macau bridge will provide a crucial (fast) road link between the three Pearl River Delta cities, and presents an opportunity for Macau to capitalise on Hong Kong’s growth constraints and attract more services.

So what are the big questions impacting LCC development from an airport perspective? Some of these include:

  • Will North Asia’s alternative airports increase their share of LCC seats as capacity and slot constraints at primary gateways inhibit growth?
  • How can non slot constrained airports promote themselves as attractive second bases and achieve growth through tactical partnerships?
  • What can secondary airports offer to attract the region’s LCCs? And how can they coordinate efforts with local tourism authorities and other regional bodies to stimulate the market?

This will be one of the topic areas discussed at the forthcoming CAPA- Centre for Aviation LCCs in North Asia event which makes a return to Seoul, South Korea for its 2018 edition on 11-Jun-2018 and 12-Jun-2018.

Understanding aviation markets is CAPA’s great strength and passion and this year’s agenda includes a variety of topics sure to generate interest.  Matchmaking for further growth – what are LCCs looking for in establishing new bases and what greater role is in store for alternative and secondary airports? will be the concluding panel of the morning session of the Seoul forum on 11-Jun-2018.

It’s hardly a secret that the airline industry is facing myriad challenges, notably in the marketing and distribution areas, as companies with personalised data, and the analytics and artificial intelligence to go with it, become greater threats to the stability of the traditional airline model.

Despite lacking the seat penetration rate of peers in other markets, with about 11% of seats within North Asia operated by LCCs compared with 56% in Southeast Asia and 40% in Western Europe, LCCs are beginning to flourish in this region. The LCC model may now be well understood here, but the operating environment is increasingly complex, competitive and interconnected. Long haul low cost, full service airlines adding LCC subsidiaries, and many other developments are high on the agenda.

This high-level aviation event, hosted at The Grand Hilton Seoul, around 15 minutes from downtown Seoul, is a forum for debate and discussion of strategic issues facing the LCC industry in North Asia.

FIND OUT MORE… visit the CAPA LCCs in North Asia 2018 homepage to find out more about this not-to-be-missed opportunity to discuss relevant issues impacting the aviation sector and learn meaningful insights from your industry peers.