10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows

hort haul capacity growth slows | CAPA

10-Jan-2016 5:21 PM

Southeast Asia’s low cost airline fleet expands

by 13% in 2015 as short haul capacity growth
slows

Southeast Asia’s low cost carrier fleet has passed the 600 aircraft mark as the region’s 23 LCCs
added about 70 aircraft in 2015, resulting in 13% growth. The region’s LCC fleet has expanded by 50%
in only three years, from 400 to just over 600 aircraft.

Nevertheless, LCC capacity growth within Southeast Asia slowed significantly in 2015 for the second
consecutive year, as several carriers made adjustments in response to challenging market conditions.
For the first time since the birth of LCCs in Southeast Asia 15 years ago there was a drop in the LCC
penetration rate within Southeast Asia.

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 1/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

There was faster LCC capacity growth in medium/long haul markets connecting Southeast Asia with
other regions, driven by a 37% expansion of the Southeast Asian LCC widebody fleet. There are now
seven LCCs in Southeast Asia operating widebody aircraft, compared with only seven in the rest of
the world.

Southeast Asian LCC sector surpasses 600 aircraft

Southeast Asia’s 23 LCCs ended 2015 with 610 aircraft, according to the CAPA Fleet Database. The
fleet grew by about 13% in 2015, matching the growth rate from 2014 but significantly slower than the
20% growth rate in 2013.

Southeast Asia’s LCC fleet has grown by over 50% since the beginning of 2013, when it consisted of
about 400 aircraft.

Southeast Asia LCC fleet by carrier: Jan-2016 vs Jan-2015, Jan-2014, Jan-2013

Fleet
Fleet 
Fleet Fleet
at
at at at
Rank Carrier Country  LCC Group  1-
1-Jan- 1-Jan- 1-Jan-
Jan-
2015 2013
2014  
2016

1 JT Lion Air Indonesia Lion   110 103 94 91 

2 AK AirAsia Malaysia  AirAsia   80 80 72 64 

3 IW Wings Air Indonesia Lion   48 31  27 27 

4 5J Cebu Pacific Air Philippines  Cebu Pacific  47 48  48 41 

5 FD Thai AirAsia Thailand  AirAsia   45 40  35 27

6 QG Citilink Indonesia  (Garuda)   36 32  24 21 

7 DD Nok Air Thailand  Nok  28 24  17 15

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 2/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

8 VJ VietJet Air Vietnam  VietJet  27 18  10 5 

9 OD Malindo Air Malaysia  Lion   27 19  11 0 

10 TR Tigerair Singapore  Tigerair   24 24  25 21

 11 QZ Indonesia AirAsia Indonesia  AirAsia   24 29  30 22 

12 D7 AirAsia X Malaysia  AirAsia X   20  23  18 11 

13 3K Jetstar Asia* Singapore Jetstar  18  18  19 18 

14 SL Thai Lion Air Thailand  Lion   18 8 2 0 

PQ/
15 Philippines AirAsia# Philippines  AirAsia#   13 16  17 17 
Z2

16 BL Jetstar Pacific Vietnam  Jetstar   12 8  5 5 

17 TZ Scoot Singapore  (Singapore Airlines)   11 6  6 4

18 DG Cebgo^ Philippines  Cebu Pacific 8  4  5 5 

19  XJ  Thai AirAsia X Thailand AirAsia X 5  2 0  0

Golden Myanmar
20 Y5 Myanmar  Golden Myanmar   3 3 2 0 
Airlines

 21 XW  NokScoot Thailand Nok  3  0  0 0 

 22 XT  Indonesia AirAsia X  Indonesia AirAsia X   2 0   0  0

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 3/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

 23   Thai VietJet Air Thailand VietJet  1  1   0 0 

N/A RI Tigerair Mandala Indonesia  Tigerair   0 0  9 5

     TOTAL      610 537 476 399

Notes: *Valuair included in Jetstar Asia figures for Jan-2013 and Jan-2014. Valuair was a Jetstar Asia subsidiary prior to being folded
into Jetstar Asia in 2014. 
^Cebgo was known as Tigerair Philippines until 2015. It was acquired by Cebu Pacific in 2014 and took over Cebu Pacific's turboprop
fleet in 2015, while returning its A320s to Cebu Pacific. This resulted in a drop in the fleet size at Cebu Pacific, as Cebu Pacific had eight
turboprops while Tigerair Philippines had four A320s.
#Fleet figures for all years combine Philippines AirAsia and Zest AirAsia. Zest was acquired by AirAsia in 2013 but operated under a
separate AOC until late 2015.  
Tigerair Mandala suspended operations in mid-2014 
Source: CAPA - Centre for Aviation

Southeast Asia now has seven long haul LCCs

The widebody segment grew at the fastest rate, 37%, but on a relatively small base. There are
currently 52 widebody aircraft operated by seven Southeast Asian LCCs. At the beginning of 2014
there were 38 widebody aircraft operated by five Southeast Asian LCCs.

Thailand’s NokScoot and Indonesia AirAsia X launched operations in 2015, joining Malaysia AirAsia X,
Thai AirAsia X, Scoot, Cebu Pacific and Lion Air with widebody operations. Cebu Pacific and Lion
operate widebody aircraft alongside predominately narrowbody fleets, while the other five carriers
are purely widebody operators.

Southeast Asia LCC widebody fleet size ranked by operator: Jan-2016 vs Jan-2015

Rank Airline Country 1-Jan-2016 1-Jan-2015
1 D7 AirAsia X Malaysia 20 23
2 TZ Scoot Singapore 11 6
3 5J Cebu Pacific Philippines 6 5
4 JT Lion Air Indonesia 5 2
5 XJ Thai AirAsia X Thailand 5 2
6 XW NokScoot Thailand 3 0
7 XT Indonesia AirAsia X Indonesia 2 0
    TOTAL   52 38
Source: CAPA Fleet Database

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 4/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

Scoot recorded the biggest growth among Southeast Asia’s long haul LCCs, adding five aircraft. This
Singapore Airlines long haul low cost subsidiary took delivery of 10 787s in 2015, while retiring five of
its six 777-200s.

See related report: Scoot approaches profitability & becomes SEAsia’s top performing long haul LCC,
boosting SIA outlook

Thai AirAsia X, which launched in 2014, added three aircraft in 2015. Indonesia AirAsia X launched in
2015 with an initial fleet of two A330s. But parent Malaysia AirAsia X shrank its fleet by three aircraft
as it phased out its inefficient A340s and restructured its network.

Lion took three A330-300s in 4Q2015. The new A330s are expected eventually to replace Lion’s fleet
of two ageing 747-400s but at least for now these two 747-400s are still being operated.

See related report: High density A330-300s give Indonesia’s Lion Air an opportunity to test a long
haul low cost model

(Note: Indonesia AirAsia X has been operating some of Indonesia AirAsia's A320s to meet minimum
aircraft regulations in Indonesia, but in this report these A320s are still counted under Indonesia
AirAsia as they are still being operated under the AirAsia brand.) 

Southeast Asian LCC turboprop also grew by more than 30% in

2015
The turboprop segment also grew rapidly from 58 to 77 aircraft, representing 33% growth.

Lion Group regional subsidiary Wings Air accounted for almost all the additional aircraft, expanding
its ATR 72 fleet from 31 to 48 aircraft.

Thailand’s Nok Air also added two Bombardier Dash 8 Q400s as its turboprop fleet expanded from
six to eight aircraft. Malindo Air, Cebgo and Golden Myanmar are the other turboprop operators in
the Southeast Asia’s LCC sector, but none of these carriers added any turboprops in 2015.

Lion Group leads narrowbody growth

The remaining 510 aircraft in Southeast Asia’s LCC fleet are narrowbody jets – a mix of 737 and A320
family aircraft. The narrowbody segment grew by a relatively modest 9% in 2015 but on a much larger
base than the widebody or turboprop segments. There are currently 40 more narrowbody aircraft in
service at Southeast Asian LCCs, compared with the situation one year ago.

Thai Lion Air underwent the fastest narrowbody growth, adding 10 737s. Its Malaysian sister carrier,
Malnido Air, added eight 737s, while Indonesian parent Lion Air added four 737s.

As outlined above, Lion’s Indonesian regional subsidiary Wings Air added 17 ATR 72s, making it the
fastest growing LCC in Southeast Asia, based on aircraft numbers. The rapid growth of the Lion
https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 5/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

Group fleet in 2015, including growth at full service subsidiary Batik Air, was analysed in a separate
report published on 9-Jan-2016.

See related report: Lion Group added 57 aircraft in 2015, overtaking AirAsia as SE Asia’s largest
airline group fleet

Vietnam’s VietJet Air added the second highest number of narrowbody aircraft among Southeast
Asian LCCs: eight A320 family aircraft. The fast growing LCC ended 2015 with 24 A320s and three
A321s, compared with 18 A320s at the end of 2014 (excludes wet-leased aircraft).

See related report: VietJet Air 2016 outlook: overtakes Vietnam Airlines in domestic market as IPO
planned for 1H2016

Other Southeast Asian short haul LCCs growing their narrowbody fleets in 2015 included Thai AirAsia
with five aircraft, Citilink with four aircraft, and Jetstar Pacific with four aircraft. The fleet of AirAsia
Group’s Malaysian subsidiary was flat, while the group’s affiliates in Indonesia and the Philippines
shrank their fleets as part of turnaround efforts. Jetstar Asia and Tigerair also did not grow their fleets
in 2016, as both responded to challenging conditions in Singapore’s short haul market.

LCC capacity growth within Southeast Asia slows

Decisions to slow expansion, by the AirAsia Group and some of the region’s smaller players, led to a
significant reduction in short haul LCC capacity growth in 2015. Within Southeast Asia LCC seat
capacity was up by only about 9%, according to OAG data. Not surprisingly, this matches the 9%
growth figure for Southeast Asia’s narrowbody fleet.

FSC seat capacity within Southeast Asia was up by 14% in 2015, outpacing LCC growth for the first
time since the first Southeast Asian LCCs launched operations about 15 years ago. As a result, the
LCC penetration rate within Southeast Asia dipped for the first time, after 15 years of steady gains.

Southeast Asia annual LCC penetration rate: 2003 to 2015

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 6/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

Source: CAPA – Centre for Aviation & OAG

LCC seat capacity between Southeast Asia and other regions continued to grow faster than FSC
capacity, but on a much lower base. LCC seat capacity between Southeast Asia and other regions
was up 14% in 2015, driven by rapid expansion of Southeast Asia’s long haul LCC sector.

As the above chart illustrates, LCCs accounted for 18.6% of total seat capacity to and from Southeast
Asia in 2015, and 56.4% of seat capacity within Southeast Asia.

Again in 2016 - relatively slow short haul LCC growth

2016 will likely experience a similar trend line, with relatively slow LCC capacity growth within
Southeast Asia and more rapid growth on routes connecting Southeast Asia with other regions in
Asia Pacific.

There are still opportunities for short haul LCC growth within Southeast Asia as the overall market
continues to grow, boosted by economic growth and expansion of the region’s middle class
population. Pioneer markets such as Myanmar and Vietnam, particularly, have a lot of potential.

That said, with the LCC penetration rate on short haul routes within the region already approaching
60% the market overall is now relatively mature. The extremely rapid growth rates from prior years,
such as the 30% growth in LCC seats that was recorded in 2013, are simply no longer a realistic
outcome.

The market began slowing down in 2014, with LCC capacity growth for the year at 14% within
Southeast Asia. The 9% growth figure from 2015 represents a reasonable figure for the future.

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 7/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

Medium haul markets should see faster growth

CAPA projects 70 to 80 aircraft will be added to the Southeast Asian LCC fleet in 2016, resulting in a
similar rate of fleet growth as in 2015. Once again, capacity in 2016 will grow much faster in markets
connecting Southeast Asia with other regions, particularly North Asia, using a combination of
widebody and narrowbody aircraft. There are still huge opportunities for growth in markets such as
Southeast Asia-China, given the relatively low penetration rate and surging demand.

There will still be some opportunities for domestic and short haul international growth. Southeast
Asian LCCs currently have over 1,100 aircraft on order, but inevitably a large portion of the aircraft on
order will be used to replace the 600 aircraft currently in service, and to grow in medium haul
markets that are still relatively underpenetrated.

Southeast Asia LCC group fleet size and order book: as of 1-Jan-2016
Number Current
Airline Group  Orders
of carriers  fleet size 
Lion Group 4 203 507
AirAsia/AirAsia X  7 188 385
Cebu Pacific                         2 55 51
Garuda (Citilink) 1 36 44
SIA (Scoot/Tigerair)  2 35 49
Nok         2 31 13
Jetstar 2 30 0
VietJet 2 28 88
Golden Myanmar             1 3 0
TOTAL  23 609 1,137
Note: only includes LCC subsidiaries that are based in Southeast Asia. For example Batik is excluded from Lion Group and AirAsia India
excluded from AirAsia Group.
Orders are based on location of the parent. For example, Jetstar orders are placed by its Australia-based parent and therefore are not
included. All AirAsia orders are included as its parent is based in Southeast Asia, although some aircraft will end up at affiliates outside
Southeast Asia.  
Source: CAPA Fleet Database

Fewer than 100 of the 1,100 plus orders are for widebody aircraft. New generation narrowbody aircraft
account for the majority of the orders.

The 737 MAX and A320neo families come with improved range and efficiency, enabling Southeast
Asia’s LCC narrowbody operators to reach new markets outside the region and reduce their reliance
on the relatively saturated short haul market.

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 8/9
10/08/2018 Southeast Asia’s low cost airline fleet expands by 13% in 2015 as short haul capacity growth slows | CAPA

The long term outlook for Southeast Asia’s LCC sector remains bright as long as the airline groups
continue to make adjustments, avoid aggressive expansion in saturated markets, and direct growth to
markets where there are better opportunities.

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site,
along with access to many areas of our comprehensive databases and
toolsets.

Find Out More

https://centreforaviation.com/analysis/reports/southeast-asias-low-cost-airline-fleet-expands-by-13-in-2015-as-short-haul-capacity-growth-slows-260689 9/9