More turbulence ahead for South-east Asian airlines

Significance

However, other difficulties are facing South-east Asian aviation; premium carrier Singapore Airlines is considering job cuts after reporting its first quarterly earnings loss for three years in late May. Meanwhile, airlines in Thailand, Malaysia, Indonesia and the Philippines have also sustained lower profits, blaming intensifying competition and higher costs.

Impacts

• Premium airlines’ revenues will weaken further as passengers shift to budget airlines.
• Secondary destinations will gain the most from deregulation, especially in Vietnam, Cambodia, Laos and Myanmar.
• In these countries, second-tier cities will need new hotels and other leisure infrastructure as tourism numbers rise.
• Some LCCs could struggle to meet pilot training and safety standards as the industry matures.