The Development Of The Low Cost Airline Industry In Asia Tourism Essay

In this study will concentrate on the development, the impacts, and further development of low cost air hose in Asia.Base on the elevation of air power industry and touristry industry, the demand of air traffic is immense. On the other manus, base on the travel forms was change people will go independent to go and will take more

cheaper conveyance to the peculiar finishs. Therefore, the demand of low cost carrires is acquiring addition and go a popular conveyance to utilize to go.

The findings of this study are important to demo that, low cost carrires can increase the air traffic, incease the economic degree, and increase the sum of tourers of the state. However, the deduction of these sort of issues, it will happen the overcrowding, the addition of cost of life, and increase the air emanation. For

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All these findings, it is necessary to hold a great control of air traffic.

Therefore, in the decision of this study, will concentrating on the farther development of low cost bearers. The major challenges of low Cost carrires are the deregulating, fuel cost, and air emanation cost. Beccasue China and Japan are more restrict the path and monetary value strategic of the air hose and the continuely high cost of fuel, even the air emanation cost is one of the cardinal cost of the air hoses. At the consequence, different states should necessitate to continuely negotiate with others for the deregulating job, and need to pay attending to the fuel cost, and to put up policy to command the air emanation job.

This study will turn to the assignment subject. ‘Discuss the development of the low cost air hose industry in Asia

The subject chosen for this study is the development of Low cost air hose in Asia Tourism

industry. To turn to the complexnesss of this subject, it is necessary to get down the study with an apprehension of low cost air hose and Aisa touristry industry. In a broader country, it is necessary

to concern the impacts of Aisa, and deduction for the hereafter. It is of import to maintain in head the planetary impact on the Tourism Industry that these alterations could hold.

However, base on the restriction of clip and information, this study will concentrate on China, Hong Kong, and Japan to look into all of the issuse of low cost airline.Moreover, because these three parts are most popular to discourse and people will familiar with the state of affairss of these regions.Therefore, the following contemt will look into these three parts and all of the issues.

2. What is Low Cost Airline?

Harmonizing to ITF ( 2002 ) , the operation theoretical account of low cost bearer is point to pint services, normally low cost bearers will chiefly concentrate on short draw flight between 400 -600 maritime stat mis, even they will non hold catering and amusement service inflight.

Furthermore, they will utilize one aircaft type to heighten the use and cut down the maintanace cost ; besides they will frequently utilizing secondary airdromes with cheaper landing charges. In add-on, they will concentrate on the lower income market and base on the clip of engagement and pick of flight

3. The Developmet of Low Cost Airine

Refer to Thomas Bieger, Andreas Wittmer ( 2006 ) , in the early 1970s, the first Low cost air hose manner was operated by Southwest Airlines in the United Stated. For the charateristics of this manner, the Southwest Airlines was merely supplying the individual category and no frills air travel services that means they will no supply the repast and bites, and merely supply the economic category for riders. Furthermore, the menu monetary value was low and high limitation, that means the menu will hold a high penality for those who need to alter the clip and location of the menu.

Base on the liberalization, deregulating and release of unfastened skies policy. More Low cost air hose was inccur and base on the growing of air travel ( WTO 2002 ) , the demand of aircraft was immense. Therefore, air travel was a potental market to develop.

Figure, 1

For the development of Asia, In 1998 the two low-priced bearers, Skymark Airlines and Air Do, entered, severally, the Tokyo-Fukuoka path and the Tokyo-Sapporo path. In South Korea, the LCCs, Hansung Airlines and Jeju Air, entered the domestic market in 2005 and 2006 severally, and two more LCCs, viz. , Yeongnam Air and Jin Air, merely entered the market in July 2008. In Hong Kong and Macau, the two Particular Administrative Regions of China, Oasis Hong Kong and Viva Macau are the

several LCCs, both functioning long-haul international paths – in consequence, established in 2004 Viva Macau is the first long-haul LCC in Asia

In 2005, the first low costairline was established in China which was Jumping air hose. Spring Airline was established by Spring Travel and their operation theoretical account was rather similar to Southwest Airliness, they besides merely supply individual category and no frills services. Jumping Airine was merely supply the domestic flight and have about 34 paths within

China.

4. Feasibility Study of Potential Market

Harmonizing to World Airline Report ( 2008 ) , In 2008 the Revenue rider kilometers

was approximately 355,243. For 2009 the Revenue rider kilometers was about 313,469.

Although, the gross was lessening about 11.8 % ( Figure, 2 ) . However, it was immense gross for the air hose idustry within Asia Pacific. On the othe manus, in 2009 the sum of riders was abot 75,363,000 and in 2008 the sum of riders was about 84,586,000 ( Figure, 2 ) , and lessening approximately 10.9 % . However, it can turn out that the Asiatic market still have a big demand of the air power industry.

Figure, 2

3. 1 China

Base on the World Tourism Organisation Report ( 2004 ) , Approximately 108 million foreign visitants travelled to China, and 18 per centum addition from 2003 and a 10 per centum addition from 2002.Foreign tourers who stayed at least nightlong reached 41 million, up 24 per centum from 2003 and 11 per centum from 2002.

Furthermore, foreign exchange gross from touristry reached 25 billion US dollars, a 47 per centum addition from2003 and a 25 per centum addition from 2002. In add-on, the figure of domestic tourers will make 930 million.Domestic touristry gross isexpected to transcend 400 billion Yuan, 5.9 percenthigher than that of 2003 and 3.1 per centum higher than that of 2002.

3.2 Hong Kong

On the other manus, in 2004, Hong Kong obtained over 21.8 million tourer reachings, stand foring an addition of 40.4 % as compared to 2003.Moreover, the strong public presentation of the touristry industry was chiefly attributable to the dramatic growing of the Mainland reachings, particularly after the execution and continual enlargement of the Individual Visit Scheme which covers occupants of Beijing, Shanghai Guangzhou, under the auspicesof the Close Economic Partnership Agreement ( CEPA ) with Mainland China.

During 2004, over 12.2 million Mainland tourers visited Hong Kong, with over 4.2 million going under the Individual Visit Scheme. Meanwhile, other major abroad markets besides exceeded pre-SARS degree andare turning healthily.

3.3 Japan

Harmonizing to World Tourism Organisation Report ( JNTO ) international visitants to Japan in 2004 ( January to December ) is estimated to be 6.1million tourers, up 17.9 % from last twelvemonth.

Base on World Tourism Organisation Report ( 2004 ) , the entire figure of Nipponese travelers to Republic of Korea in 2004 was 2.4 million tourers and it exceeded the same figure in 2002. This is attributed to the popularity of Korean TV dramasinJapan.The entire figure of Nipponese travelers to China in 2004 ( January to November ) was 3 million.

The entire figure of Nipponese travelers who went to Taiwan, state of China and Singapore was 890,000 and 598,000 severally. Both figures exceeded 2003 figures when SARS was an issue, but did non make the figure of 2002.

4. Low Cost Carrier Contribution in China

Harmonizing to Civil Aviation Administration of China Report, In 2007, GDP reached 24.6619 trillion kwais, an addition of 11.4 % , the fifth back-to-back twelvemonth growing rate of more than 10 % .

Base on the CAAC study, over the last five old ages Chinese civil air power has seen a rapid growing, averaging 20 % one-year growing rate. In 2007, the completion of the sum

Transportation turnover 36.53 billion ton-km, rider turnover 279.17billion person- kilometres, rider conveyance volume of 190 million riders, lading and

Mail turnover 11.64 billion tonkm, lading and mail conveyance volume of 4.019 million dozenss, severally, compared with 19.5 % last year17.8 % , 16.3 % , 23.5 % , and 15.0 % ( Figure 1,3 )

Low cost air hose to finish a entire turnover of 1.85 billion ton-km, an addition of 216.9 per centum, accounting for 5.1 % of the industry, an addition of 3.2 per centum points ( Figure 2 )

Figure 1 2005-2007 Annual alteration in the entire transsportation turnover growing

Jan March May Jul Sep Nov

Million dozenss km

Jan March May Jul Sep Nov

Million

Peoples

Figure 2 2005-2007 Annual growing in rider traffic alterations

Figure 3 2005-2007 stocking alterations in postal traffic growing

Jan March May Jul Sep Nov

Million

Peoples

4.1 Low Cost Carrier Contribution in Hong Kong

By the Census and Statistics Department study ( 2008 ) , In the first one-fourth of 2008, Hong Kong ‘s GNP increased by 6.5 % over a twelvemonth before to $ 427.3 billion at current market monetary values. The Gross Domestic Product ( GDP ) , estimated at $ 409.3 billion at current market monetary values in the same one-fourth, recorded a 9.6 % addition during the period. Compared with GDP, the value of Hong Kong ‘s GNP was larger by $ 18.0 billion in the first one-fourth of 2008, stand foring a net external factor income influx of the same sum, and tantamount to 4.4 % of GDP in that one-fourth.

Furthermore, Hotel tenancy across all classs of hotels in January 2009 was 79 % , eight per centum points lower than in January 2009. The geographic locations with the highest tenancy were Yau Ma Tei/Mong Kok, where hotels recorded mean tenancy rate of 85 % . The mean achieved hotel room rate across all hotel classs was HK $ 1,117, 10.3 % lower than in January 2008.

4.3 Low Cost Carrier Contribution of Japan

Harmonizing to Department of National Accounts Economic and Social Research Institute Cabinet Office, the study of Quarterly Estimates of GDP ( 2009 ) , the GDP of

foremost quarterly was about 521,560 trillion hankerings, and in 2008 the GDP of first quarterly was about 569,139 trillion hankerings.

Furthermore, for the private ingestion between 2008 and 2009, the sum of private

Consumption in 2008 was about 312, 069 and in 2009 was about 303,639 trillion hankerings.

5 The Drawbacks of Low Cost Carrires

Base on the analysis of China, Hong Kong, and Japan, although low cost carrires can

Increase the econmoic degree of these three parts. However, for the econonmic point of position, when the Gross Domestic Product acquiring addition, the cost of life will besides

acquiring addition. Becase of the rising prices job for the goods and merchandises, people may non affordable to buy the goods and merchandises. Morover, it will besides happen

the unequal income distribution, that means rich cat can acquire more rich and hapless cat will acquire more hapless.

On the manus, when the demand of low cost air hose addition, that mean the demand of

air traffic will increase excessively. For this issue, it may happen the overcrowding for the airdrome. The capacity of the airdrome a bound, if excessively many flight semen to the airdrome, it may happen the congestion of air traffic, the congestion of track and apron and increase the accident rate of air traffic.

Furthermore, air traffic histories in a ample manner in the emanations of C dioxide – the most credited international estimations go from a lower limit of 3 % to a upper limit of 10 % . However, Aviation accounts for 2 % of semisynthetic planetary C emanations, and with current planetary demand for the air power industry increasing, it is predicted to turn to 3 % by 2026.

6. Decision

To sum up this study, after the analysis of the development of low cost Airline in Asia, all of the evidents and informations can turn out that low cost Airline a continue contribute the Asiatic parts such as China, Hong Kong, and Japan. Airline Industry is one of the cardinal conveyances within Asia, the authorities of these parts, need to pay atttention to develop and command.

But for the farther development of Low cost air hoses within Asia, there are some barrires will impact the enlargement of Low cost bearers. The first 1 is the deregulating issued, China and Japan are more restrict their sky policy such as Chinese authorities will restirct the path of the flight and the monetary value stucture of the

air ticket, because the authorities will more protect the local air hoses.

Second, China and Japan are deficiency of secondary airdrome. For China countries, all of the major airdromes are chief airdrome. If low cost carrires want to entry this market, they can non redcue the operation cost and can non vie with the regional air hoses.

Thrid, Hong Kong air power market was monopoly by Cathy Pacify ; the Oasis Hong Kong was a good illustration to turn out that if the market was monpoly by a big air hose

Company, they can non last.

The last 1 is the fuel cost issue, although the international petroleum oil monetary values have late fallen from the extremum of US $ 70-odd to US $ 50-odd. However, the fuel cost is

one of the major cost of air hose companies. If the petroleum oil monetary values return to top out of US

$ 70-odd or higher, the lost cost air hose can non last with this issue.

Therefore, for the farther development of Low cost carrires these sorts of issue are necessary to concern and may to hold greater dialogue of all the states to

discourse all these issues.

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