As competition increases among low cost carriers across Asia-Pacific, some are adopting GDSs for the first time or collaborating with other airlines.
Abacus, the APAC-based travel technology solution provider, asked 20 major LCCs across the APAC region to understand the challenges faced, and their short and long term initiatives.
Four in ten LCCs cited competition from other LCCs as a significant challenge, whereas only 4% respondents see full service carriers as a significant challenge.
In a survey by Abacus among travel management companies and corporate travel agencies in the APAC region, it was revealed that 73% of corporate clients increased their preference to use LCCs.
But, 80% of respondents still say that tapping into corporate travellers is a challenge (refer the graph below).
While the traditional direct channel (airline website) contributes 53% of bookings for LCCs, Abacus believes LCCs are moving towards non-web channels like the GDSs to tap new customers.
Half of the carriers it spoke to have integrated with a GDS in some and another six have expressed an interest in doing so.
Recently, this trend was observed among APAC-based LCCs such as Tigerair (including the new LCC Tigerair Taiwan) that signed a distribution agreement with Travelport and Amadeus, and Air Asia's deal with Travelport.
Abacus says LCCs are deploying a more collaborative strategy as competition intensifies in the APAC market - around a third say they want to partner with other airlines to increase the reservation opportunity.
Meanwhile, a vast majority see a 6-20% growth in the short term, and another 11% estimate over 20% growth.
The Abacus LCC/Hybrid Study, Asia Pacific 2014, was conducted in Q3 and Q4, 2013 among 49 executives from 20 major LCCs across Asia-Pacific.
NB:Air Asia image via Shutterstock.