Asia's Discount Airlines Eye U.S., Europe

Few countries have open-skies policies on routes to and from the US that would allow low-cost airlines to use popular routes such as New York-Tokyo. Instead, start-ups are often diverted to lesser hubs.

That may sound ominous for large carriers who rely on business-class revenues to cover their overheads. But industry analysts say that growth in low-cost airlines in Asia has expanded the market by luring price-sensitive passengers who might otherwise not travel, particularly on short vacations or family visits, so start-up carriers may not directly cannibalize full-service airlines.

Air travel in the Asia-Pacific region grew 4.7 percent in the past year, an industry association said Wednesday. Its 17 airline members flew 134 million passengers in 2006, up from 128 million the previous year.

As budget carriers carve out routes in India and across much of East Asia, with the exception of China's tightly regulated skies, short breaks have become the norm for more travelers. Resort islands like Phuket in Thailand have embraced low-cost carriers, becoming an alternative to the capital, Bangkok.

However, the choice of airline can be misleading. Industry analysts say that passengers who swoop on the cheapest online fares often arrive at their destination and check in at five-star hotels, using the money saved from their bargain round-trip tickets. By adding long-haul flights to the mix, quick getaways to luxury resorts in Asia are within reach.

Stuart McDonald, an Australian who runs a website, , on independent travel in Asia, calls this the "flash packer" phenomenon: young salaried backpackers who like to splurge on vacations and wouldn't dream of joining a cruise ship. He says long-haul budget carriers like AirAsiaX can funnel more independent travelers and first-time visitors to Malaysia, an emerging hub for low-cost airlines, giving them a taste of what the region has to offer.

"This is precisely the sort of development that will see more backpackers turn into 'flash packers.' The bucks they save on their fare will translate into increased spending on the ground," Mr. MacDonald says.

(c) Copyright 2007. The Christian Science Monitor

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