Impacts of Low Cost Carriers on Singapore

Abstract

The Singapore government has responded quite positively to the development of low cost carriers (LCCs) in recent years by developing the airport infrastructure and adopting liberal traffic rights policies. It is anticipating a healthy growth of LCCs here; and there is an expectation that the potential benefits brought about by them will be significant. This study provides an analysis of the markets and networks of the LCCs in Singapore and the impacts they make on the local air transport landscape. This is done with comparative studies of other airports in the region, particularly those in Southeast Asia which also cater to the LCCs. In addition, this research aims to analyse the development of LCCs in Singapore and their potentials in increasing the connectedness and connectivity of Singapore with the region. The frequency of flights to the various destinations served by LCCs as well as the seat capacity (supply) of the flights are calculated and analysed. New routings developed by the LCCs which are previously not serviced by Full Service Carriers (FSCs) are also examined. The thesis also aims to explore whether the Singapore governmentb s large spending in promoting the LCC industry here is justified. Passengersb opinions on the LCCs they prefer are looked at as this will indirectly indicate the type of LCC which will thrive well in Singapore. The Civil Aviation Authority of Singapore (CAAS) has devoted much efforts and resources to promoting the LCC industry at Changi. Through a critical review of the dynamics of the LCC industry and the nature of competition and trends in travel patterns in this region, the study will determine if the expected growth of LCC activities will materialise and what are the impacts we can expect from the development of LCCs.