Date:12/02/2007 URL: http://www.thehindubusinessline.com/2007/02/12/stories/2007021200630602.htm

Back Turbulence ahead for big carriers

Our Bureau

LOW COST is the way to go.

The Centre for Asia-Pacific Aviation (CAPA) has made a gloomy prediction that large carriers will be driven out of the market if they fail to follow the model of low-cost carriers. "Any new entrant must be low cost and any existing airline not heeding this message will soon become an ex-airline," the CAPA Executive Chairman, Mr Peter Harbison, was quoted as saying in the Shipping Gazette.

More alarming is his warning that the rise of low-cost carriers will be more rapid than the consolidation in the industry, thus posing an even greater threat to the survival of large carriers. This is because, as it has been explained, large-scale consolidation will not happen in Asia. "Who is going to consolidate? Not Thai Airways, or Singapore Airlines," he observes.

Meanwhile, as it is pointed out, the Asian sky is set for a dramatic change in 2007 with the opening up of the domestic aviation markets to foreign rivals, perhaps as a prelude to the Asean agreement in 2008.