No-frills airline idea is catching on globally

HONG KONG — The theory is simple enough: Sell the tickets cheap and more people will fly — even if they’re herded aboard like cattle with nothing more than peanuts and soft drinks for dinner.

Low-cost airlines have been a success in the United States and Europe, and a new batch is swooping into Asia to see if the formula can work here. Some of the new carriers are independents, while others are owned by larger airlines.

Singapore Airlines is the latest big player planning a low-cost carrier, Tiger Airways, expected to begin flying next year. Singapore’s partner is the founder of the budget European carrier Ryanair; they haven’t announced Tiger’s ticket prices yet.

But Indonesia’s Lion Air, which also plans to begin operations in 2004, said a one-way ticket from Singapore to Jakarta would cost $49, compared with about $313 on a full-service carrier.

Thai Airways plans its own low-cost airline, and British tycoon Richard Branson is moving into the New Zealand market with Pacific Blue Airlines after starting up Virgin Blue in Australia. Travel agents charge about $855 for a Virgin Blue flight from Melbourne to Perth, compared to $1,340 on national flag carrier Qantas — which plans its own cut-rate airline, Jetstar, next year.

Aviation experts expect more startups.

"This is going to be a big, big movement," said Peter Harbison, managing director at the Center for Asia Pacific Aviation, a consulting firm in Sydney, Australia.

The low-cost concept became a moneymaker in the United States, where it was pioneered in the 1970s by Southwest Airlines, the model for budget carriers elsewhere including Ryanair and easyJet in Europe.

"Asia is playing catch-up," said Joyce Lai, a spokeswoman for the low-cost Malaysian carrier AirAsia, which has been successful on domestic routes and moved international this month with flights to the Thai resort island of Phuket.

AirAsia claims its operating costs are less than half those of other successful Asian carriers, and it has made air travel an affordable option for more Malaysians. The concourses of Kuala Lumpur’s international airport still teem with business executives in suits and well-heeled tourists, but they’re now joined by many less wealthy travelers flying back home to visit relatives in the provinces.

"Most of the time you can get really good rates — in fact, sometimes it’s cheaper than bus tickets from Penang to Kuala Lumpur," said George Ong, who runs a travel agency on Penang island specializing in local tour packages.

But some observers note that Asia is quite different from the United States and Europe — which have huge, open aviation markets — and that could stop some low-cost carriers from enjoying the same success. Asian regulators typically have been reluctant to open up routes to more competition, although that’s easing.

Moreover, many low-cost airlines keep expenses down by flying out of secondary airports, avoiding major hubs where takeoff and landing fees are much higher while still getting passengers close enough to their destinations. That works fine in U.S. cities such as Dallas or Chicago, or in London with its multiple airports, but there are few similar places in Asia.

"If you’re flying Singapore-Hong Kong, you don’t have an opportunity to lower your costs by going to a secondary airport," said Philip Wickham, Asia aviation analyst at investment bank ING Barings in Hong Kong.