Retail in Asia

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Asia’s budget carriers running into headwinds

Low cost carriers are generally regarded as airlines that provide discounted fares and a no-frills service to passengers. They may have carried millions of budget-conscious Europeans and Americans to exotic locales over the past 30 years, but in Asia low cost carriers are hitting serious turbulence.

The recent failure of Viva Macau, a Macau-based budget carrier, nearly two years after the collapse of Hong Kong’s Oasis Airlines, has put the survival of so-called low cost carriers in this region in question again.

A lack of demand does not seem to be the problem. The underlying reasons the two carriers shared the same destiny were the lack of an "open sky" policy and an absence of a genuine low cost operating environment in the region, transport experts say.

However, not all budget carriers in Asia are struggling. AirAsia and Spring Airlines, which take advantage of a strong domestic network, have been successful in overcoming the challenges.

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