Centre for Asia Pacific Aviation predicts increased demand for low-cost carriers

Published February 9th, 2009 - 08:41 GMT

Centre for Asia Pacific Aviation predicts increased demand for low-cost carriers

• LCCs expected to outperform  in terms of traffic and earnings amidst  global financial crisis
• UAE residents increasingly cost-conscious travellers
• Sharjah International Airport announces record growth

In a recent report, the Centre for Asia Pacific Aviation (CAPA) predicts that low-cost carriers (LCCs) will sees increased demand in terms of both traffic growth and earnings this year compared to traditional airlines.

“Stormy conditions in 2008 have already helped the low-cost segment gain a larger share of global aviation,” according to the CAPA report. “Now predicted tougher economic conditions and lower fuel prices will give the sector a major advantage in 2009.”

Adel Ali, Chief Executive Officer of Air Arabia, the region’s first and largest LCC, said: “Worldwide, across the MENA region and here in the UAE, the appeal of value-for-money services is growing greater every year, as it provides travellers with low-fare offers in these unstable economic times. The low-cost model is uniquely attractive in these challenging economic times.

“Over the past five years, we have grown with the region and contributed to the ongoing economic expansion and diversification of the markets we serve,” said Ali. “We will continue to do this going forward, especially by focusing on offering compelling value propositions for customers.”

In the UAE, where Air Arabia is headquartered, a recent survey of business and leisure travellers also points to significant opportunities for LCCs like Air Arabia. According to the survey, which was carried out by YouGovSiraj, the number of UAE-based leisure travellers who said they will shift from premium to economy increased by seven per cent between October 2008 and January 2009. During the same period, the number of UAE-based business travellers who said they expected to fly economy increased by 12 per cent.

This survey on travel habits comes on the heels of the recent announcement by Sharjah International Airport that 2008 passenger traffic reached 5.28 million passengers, an increase of more than 22 per cent compared to 4.32 million passengers in 2007. During the same period, aircraft traffic at Sharjah International Airport increased 18.8 per cent, from 51,134 flights in 2007 to 60,965 flights in 2008.

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