Eric Ellis says low-cost airlines have taken off all across Asia – but some offer hair-raising flying experiences and many may be grounded again by rocketing fuel prices.
THE best Asian budget airline story I’ve heard was in 2006, while taking a short walk in Pakistan’s Hindu Kush to visit the old princely state of Chitral, a Shangri-la where Osama bin Laden is said to be enjoying the alpine air and hospitality.
In 2004, I gathered, a Pakistan International Airlines’ Fokker Friendship had overshot the runway on landing. Two years on, it was still bogged in the wheat fields that surrounded the airfield. Ticket prices and PIA’s reputation (as evidenced right there in the wheat) being what they are, rare was the Chitrali who had actually been inside a plane, airborne or otherwise.
So an enterprising local claimed the abandoned hulk, hired a local beauty to play stewardess and set up a travel agency by the plane’s door, issuing 25 rupee (20p) tickets to the cabin – double if ‘passengers’ wanted an ‘in-flight’ pakora served by the comely hostie. Siraj ul-Mulk, the local nabob who told me this tale and himself a retired PIA chief pilot, mused that this would-be aviation baron probably turned more profit from the Fokker than PIA ever had, and without maintenance overheads.
Such has been the rush into Asia’s skies in recent years by local entrepreneurs that it would not surprise me if my Chitrali hero parlayed his windfall into launching a real budget carrier. Inspired by the success of Ryanair, easyJet and America’s SouthWest Airlines – and in some cases with refugee executives from those airlines sitting on their boards – low-cost carriers have boomed from Japan to Iran and most points in between, even war-torn Afghanistan.
The most successful of these new flyboys, Malaysia’s Air Asia, is as faithful a
facsimile of Richard Branson’s Virgin as are the copy Rolexes and pirate DVDs of
Asia’s lawless bazaars. Indeed, Air Asia’s youthful Eurasian chief executive
Tony Fernandes seems to have cloned the original right down to the same
fire-engine red livery and uniforms, funky PR ‘attitude’ and even a monolithic
flag-carrying state carrier as primary competitor. Fernandes was a record
industry executive in a former life at – you guessed it – Virgin.
An arch self-promoter, Fernandes launched Air Asia just two months after 9/11, when few of us wanted to fly. Seven years and myriad one ringgit (15p) fares later, it has grown to be about three-quarters of the size of state-owned Malaysia Airlines, and is much more fun to fly. Air Asia is expected to best Kuala Lumpur’s lumbering MAS by 2010 in every industry measure: destinations served, size of fleet, and profit. The best thing going for Air Asia is what it is not: a tool of government. Malaysian leaders liked to carry MAS in their diplomatic goody bag, handing out routes willy-nilly for the photo opportunity when visiting fellow potentates in, say, Tunisia. But who really wanted to fly KL-Tunis? MAS bosses were left with profitless schedules while Fernandes’ fleet heads for places Malaysians actually want to visit. But in no country in Asia has the low-cost-carrier expansion boomed louder than in India which, with – which its miserable infrastructure that would horrify Kipling – was about the worst place it could have happened.
Around a dozen new airlines have launched here in recent years. That has
woefully over-burdened airports that were already bedlam even when there were
just three airlines; state-owned domestic carrier Indian Airlines, its big
international sister Air India (the two have now merged), and the first of the
upstarts, Jet Airways. One needs very sharp elbows when flying in India, just to
navigate the check-in pandemonium.
Now everyone seems to have joined India’s mile-high club. There are airlines owned by a brewer (Kingfisher), two by textile companies (Go Air and Paramount) and one started up by a public relations agency (Magic Air). Go Air’s promoters set a sterling example of inflight safety last year when its chairman Nasli Wadia, Jinnah’s grandson, was busted in Dubai having carried a revolver and live bullets on a flight from Bombay. Indian scanners just didn’t pick it up; at least, that was the story.
Bizarrely, the carrier that actually sprung from aviation roots, Air Deccan, was regarded by Indians as the worst of the lot, maybe one reason why it was the cheapest. I know how bad Air Deccan is, after booking three flights via the internet. It eagerly took my credit card details but the confirming emails with booking references never arrived. ‘Customer service’ naturally didn’t answer the phone – this in the land of call centres – so I only knew I had actually made a transaction when I was en route to the presumptive flight and received an SMS that it had been cancelled. That forced me into a six-hour drive, and a missed onward flight. The $19 fare ended up costing me an extra $250. I only got a refund weeks later when I emailed Air Deccan’s chief executive directly.
Deccan was recently taken over by India’s United Breweries, better known to British balti lovers as the brewer of Kingfisher beer. A brewer as aviator? Now there’s a concept that could catch on with lager-lout Brits heading for Benidorm. United Breweries also owns the Bangalore franchise in the recent Indian 20/20 cricket frenzy. With that corporate pedigree, can a cigarette company be far away?
The best budget flight I’ve taken in India wasn’t actually Indian, but Bhutanese. After halving its ticket prices, state-owned Indian Airlines was so overwhelmed by trying to keep up with all its new budget competitors that it was forced to wet-lease nice new Airbuses from Thimpu-based Druk Air. The flight was a delight; it left on time, the curry was tasty and the smiling Bhutanese stewardesses brought on board some of that Gross National Happiness their country is famous for. And – other regional carriers please note – one didn’t hazard a cholera infection when chancing the inflight facilities.
India’s crowded skies aren’t helped by a paranoid military. It insists planes must not overfly India’s ‘strategic sites’ – which it deems to be just about anywhere Pakistan might be peeking, which it thinks is just about everywhere. So Indian carriers fly along very narrow air corridors where they occasionally come all too close to bumping into each other.
If Indian skies are, in that sense, an accident waiting to happen, then Indonesian aviation is an accident that has already happened, even before oil prices started taking off. Cheap though its tickets are, the state airline Garuda – its Sanskrit name is that of a mythical bird and not, as long-suffering travellers would have it, the colonially acronymic Good And Reliable Under Dutch Administration – does not fly to Europe because it cannot keep its planes maintained to EU standards.
Despite a spate of accidents, Garuda remains the preferred carrier for
Indonesia’s frequent flyers, including oil workers, diplomats and foreign
correspondents. But that speaks volumes as to how bad the rest of Indonesia’s
50-odd airlines can be. One of the worst, Adam Air, may well have set a world
record for inflight outrages, logging as many as 500 (that we know of) breaches
or complaints in just two years until the government finally forced its closure
last month.
Disturbingly for its passengers, Adam Air flights had a habit of going off the radar screens. One 2007 flight to Sulawesi ended at the bottom of the Java Sea, with 96 killed. It took eight months to retrieve the black box recorder that revealed the plane took off with faulty navigation. Another Adam Air flight disappeared for four hours, only to emerge landing on a remote island 600km from its destination. Adam Air pilots would wrestle with ground staff, demanding they take off in patently unsafe planes. If they didn’t, their bosses, who were tight with key government officials, would sack them or dock their pay. Despite this poor safety record, such was the fervour of Indonesians to move around their sprawling archipelago, that Adam Air flights often left 80 or 90 per cent full.
But as fast as Asia’s low-cost airline sector emerged, much of it now could come undone. Oil prices are now several times higher what they were when Asia’s governments put national pride aside and started loosening their grip over their aviation sectors. Analysts contend that many of the low-cost players cannot be far from hitting the wall. One already has: Hong Kong’s Oasis Air failed in April after just 18 months of juggling oil-price futures, a $130 million disaster of timing.
The numbers are ugly everywhere, as are the portents of doom. India’s Jet Airways chairman Naresh Goyal expects industry losses in India alone to reach $2.1 billion this year. His airline’s shares have fallen 45 per cent this year, while Deccan/Kingfisher stock has dropped 65 per cent. Indian jet fuel from the state-subsidised refinery is now 80 per cent higher than it was in January. In Singapore, the region’s aviation service hub, jet fuel is 60 per cent up this year, after a similar rise last year. Standard and Poor’s says ‘few Asian airlines are reacting adequately and aggressively enough to the oil shock and the devastation soon to follow. If prices continue rising... expect to see a rash of Asian carriers... go bust.’ Goldman Sachs forecasts crude oil could top $200 a barrel: what disturbs travellers is that as costs rise, pennies may be pinched elsewhere to survive: in maintenance, for example.
The new carriers best equipped to see out the fuel crisis are perhaps those that hail from Singapore, where they have the advantage of a super-wealthy government as their major shareholder. One is Tiger Airways, part-owned by Singapore Airlines, in turn controlled by the Singapore government sovereign wealth fund Temasek Holdings – whose boss is the formidable Ho Ching, wife of Singapore’s prime minister. Tiger is run by former bmibaby chief executive Tony Davis, who has launched offshoots in South Korea and Australia.
Its main competitor out of Singapore is also its sister of sorts; Jetstar Asia, a joint venture of Australia’s Qantas and Temasek, has struggled since it launched in 2004. Curiously, its chief executive Madame Chong Phit Lian used to run Singapore’s mint. She and other fledgling Asian aviators will need certainly money-making skills if they are to survive the coming oil crunch.