July 27, 2006
Budget Airlines Hit Rough Patch As Costs and Competition Climb
Stiff competition and high fuel costs are creating turbulence for Asia’s fledgling budget airlines — and their shares.
Five years ago, Asia’s first budget carrier, Malaysia-based AirAsia, took to the skies, followed by a slew of similar airlines in India, Singapore, Thailand and Indonesia. The new airlines broke up de facto monopolies in some countries and enticed many first-time flyers with fares that often cost little more than a bus ticket.
But now, those new players are feeling growing pains.
Kuala Lumpur-listed AirAsia’s profit for the quarter ended March 31 fell 44% because of high fuel costs and …