CAPA Analysis: Southeast Asia LCC Fleet To Grow By Only 13% in 2015


Southeast Asia recorded a significant slowdown in LCC growth in 2014 as several airlines adjusted to challenging market conditions. The region’s LCC fleet expanded by 13% aircraft compared to about 20% growth in 2013.

A similar fleet growth rate of approximately 13% is likely in 2015, following further revisions to fleet plans in response to overcapacity, which has impacted most Southeast Asian short-haul markets since 2H2013. AirAsia in particular has slowed expansion and will take only five A320s in 2015 – although rival Lion Group is again not showing any signs of slowing and plans to take about 50 aircraft for the second consecutive year with over half ending up in the dynamic Southeast Asian LCC sector.

Growth rates could pick up again in 2016 or 2017 if market conditions improve. Higher growth rates ultimately will be required for Southeast Asia’s huge LCC order book, which consists of nearly 1,200 aircraft, to remain intact. The potentially huge impact of lower fuel prices could also reshape strategies in 2015, as some LCCs record a 20% reduction in total costs.

Southest Asia’s 21 LCCs ended 2014 with 536 aircraft (includes turboprops, narrowbodies and widebodies), according to the CAPA Fleet Database. This represents growth of about 60 aircraft or 13% compared to the beginning of 2014.

While still double digits there was a significant slowdown compared to 2013, when the fleet grew by about 20%.

Southeast Asia low-cost carriers ranked by fleet size: Jan-2015 vs Jan-2014 and Jan-2013

Rank Carrier Country  LCC Group  Fleet at

1-Jan-2015

Fleet at

1-Jan-2014  

Fleet at

1-Jan-2013

1 JT Lion Air Indonesia Lion 103 94 91
2 AK AirAsia Malaysia AirAsia 80 72 64
3 5J Cebu Pacific Air Philippines Cebu Pacific 48 48 41
4 FD Thai AirAsia Thailand AirAsia 40 35 27
5 QG Citilink Indonesia (Garuda) 32 24 21
6 IW Wings Air Indonesia Lion 30 27 27
7 QZ Indonesia AirAsia Indonesia AirAsia 29 30 22
8 TR Tigerair Singapore Tigerair 24 25 21
9 DD Nok Air Thailand Nok 24 17 15
10 D7 AirAsia X Malaysia AirAsia X 23 18 11
11 OD Malindo Air Malaysia Lion 19 11 0
12 3K Jetstar Asia* Vietnam Jetstar 18 19 18
13 VJ VietJet Air Vietnam VietJet 18 10 5
14 Z2 Zest AirAsia Philippines AirAsia# 14 15 15
15 SL Thai Lion Air Thailand Lion 9 2 0
16 TZ Scoot Singapore (Singapore Airlines) 6 6 4
17 BL Jetstar Pacific Vietnam Jetstar 8 5 5
18 DG Tigerair Philippines Philippines Cebu Pacific^ 4 5 5
19 Y5 Golden Myanmar Airlines Myanmar Golden Myanmar 3 2 0
20 PQ Philippines AirAsia Philippines AirAsia 2 2 2
21  XJ  Thai AirAsia X Thailand AirAsia X 2 0 0
N/A RI Tigerair Mandala Indonesia Tigerair 0 9 5
 TOTAL     536 476 399

Slower 2014 fleet growth driven by adjustments at AirAsia and Tigerair

At the beginning of 2014 the Southeast Asian LCC fleet was poised to grow in 2014 by slightly over 100 aircraft or about 22% to 580 aircraft. But the AirAsia and Tigerair groups made major adjustments in 1H2014, deferring A320 deliveries and subleasing or selling aircraft.

The Tigerair Group fleet in Southeast Asia dropped by 15 aircraft in 2014 as it closed its Indonesian affiliate and sold its Philippine affiliate to Cebu Pacific. As Tigerair suspended expansion in its original home market due to overcapacity in Singapore the aircraft that were overseas became excess and were grounded before eventually being subleased. (Note: Tigerair Australia and Tigerair Taiwan are excluded as this report focuses on the Southeast Asian market.)

The fleet at Cebu Pacific Air, which is the third largest LCC in Southeast Asia, ended flat at 48 aircraft. Cebu Pacific was initially planning to expand its fleet by four aircraft in 2015 but it ended up moving four of its aircraft to its new subsidiary, Tigerair Philippines. The five aircraft that were originally at Tigerair Philippines (which is expected to be rebranded in 2015) were returned to the Tigerair Group.

The AirAsia/AirAsia X fleet in Southeast Asia grew by about 15 aircraft as it deferred seven of the A320 deliveries which were originally slated for 2014. AirAsia was also hoping to sell 12 A320s during 2014 but ultimately was only able to sell one aircraft. (Note: AirAsia India, which began 2014 with three A320s, is also excluded as this report focuses on the Southeast Asian market.)

The Lion Group accounted for 27 or nearly half of the 60 aircraft added to the Southeast Asian LCC fleet in 2014. These figures exclude its full-service subsidiary Batik, which added more aircraft in 2014 than any of Lion Group’s LCC subsidiaries or affiliates, and aircraft placed outside the group by Transportation Partners.

Lion Air of Indonesia

Southeast Asian LCC fleet to grow by 13% in 2015, led by Lion Air

Lion Group carriers will again account for nearly half of the aircraft added to the Southeast Asian LCC fleet in 2015. The Lion Group plans to add about 50 aircraft in 2015 with an estimated 30 aircraft allocated to its four LCCs. The other 20 aircraft are projected to be used to further grow Batik or be leased out by Transportation Partners.

Overall CAPA projects Southeast Asia’s LCC fleet to grow by 13% for the second consecutive year in 2015 to slightly over 600 aircraft. Most of the figures below reflect current fleet plans while the figures for the Lion Group affiliates are estimates based on various sources. These are all net figures, taking into account retirements such as the six 777-200s at Scoot and the two A340-300s and one A330-200 at AirAsia X.

Projected fleet growth for Southeast Asian LCCs in 2015

Rank Carrier Country  LCC Group   Projected fleet

 for 31-Dec-2015

Fleet as of

1-Jan-2015

1 JT Lion Air Indonesia Lion  110 103
2 AK AirAsia Malaysia AirAsia  80 80
3 5J Cebu Pacific Air Philippines Cebu Pacific  52 48
4 FD Thai AirAsia Thailand AirAsia  45 40
5 QG Citilink Indonesia (Garuda)  37 32
6 IW Wings Air Indonesia Lion  33 30
7 QZ Indonesia AirAsia Indonesia AirAsia  29 29
8 OD Malindo Air Malaysia Lion  29 19
9 VJ VietJet Air Vietnam VietJet  28 18
10 DD Nok Air Thailand Nok  28 24
11 TR Tigerair Singapore Tigerair  24 24
12 D7 AirAsia X Malaysia AirAsia X  21 23
15 SL Thai Lion Air Thailand Lion  19 9
13 3K Jetstar Asia Vietnam Jetstar  18 18
14 PQ/

Z2

Philippines AirAsia/

Zest AirAsia*

Philippines AirAsia  14 16
16 BL Jetstar Pacific Vietnam Jetstar  10 8
17 TZ Scoot Singapore (Singapore Airlines)  9 6
18 DG Tigerair Philippines Philippines Cebu Pacific  5 4
19 XJ  Thai AirAsia X Thailand AirAsia X  5 2
20 Y5 Golden Myanmar Airlines Myanmar Golden Myanmar  3 3
21  Indonesia AirAsia X Indonesia AirAsia X  3 0
22  Thai VietJet Air Thailand VietJet  3 0
23  NokScoot Thailand Nok  3 0
 TOTAL      608 536

The upcoming launch of Indonesia AirAsia X, NokScoot and Thai VietJet will grow the total number of LCCs in Southeast Asia to 24. But the potential merger of Zest AirAsia with Philippines AirAsia (PAA) could reduce the total to 23.

The AirAsia Group launched PAA in 2012 and acquired Zest in early 2013. Zest adopted the AirAsia brand in late 2013 but the two carriers have since been operating separately. The AirAsia Group plans to seek approval in 2015 to remove the Zest brand and combine its two Philippine affiliates.

In 2014 the number of Southeast Asian LCCs stayed flat at 21 as Thai AirAsia X launched but Tigerair Mandala suspended operations. (Note: Indonesia AirAsia X, NokScoot and Thai VietJet all received their first aircraft in late 2014 but these aircraft are not included in the year-end 2014 tally as these carriers have not yet launched scheduled services and have so far only operated charter flights. These initial aircraft will be placed into scheduled services over the next few months and the fleets will subsequently grow as more aircraft are delivered.

The relatively modest fleet growth for 2015 comes after several airlines have again deferred deliveries or suspended expansion. AirAsia is planning to take only five A320s in 2015 after deferring or selling 24 of its original 29 deliveries.

AirAsia X also has deferred two A330-300s, giving it six deliveries. AirAsia X is also returning its two A340-300s and one A330-200 in 2015, resulting in a net gain at the long-haul low-cost group of only three aircraft.

Both of Singapore’s short-haul LCCs, Tigerair and Jetstar Asia, have suspended fleet expansion until at least 2016. Cebu Pacific, Citilink and Nok expansion will be relatively modest – four to five additional aircraft for each carrier.

Lion and VietJet continue to pursue rapid expansion

Only the Lion and VietJet groups for now do not show any signs of slowing down. VietJet plans to add another 10 aircraft in Vietnam and also launch its first joint venture, Thai VietJet, which plans to begin operating scheduled services in Mar-2015.

As CAPA highlighted on 20-Jan-2015, VietJet has already surpassed Tigerair and Jetstar Asia to become the eighth largest LCC in Southeast Asia based on current capacity. VietJet will surpass likely Indonesia AirAsia and potentially Nok in 2015.

Southeast Asia’s top 10 LCCs ranked by seat capacity: 19-Jan-2015 to 25-Jan-2015

Rank Airline Total Seats
1 JT Lion Air* 1,083,194
2 AK AirAsia 550,260
3 5J Cebu Pacific Air 366,997
4 FD Thai AirAsia 338,040
5 QG Citilink 230,760
6 DD Nok Air 218,204
7 QZ Indonesia AirAsia 198,360
8 VJ VietJet Air 156,060
9 D7 AirAsia X 122,148
10 TR Tigerair 120,240

AirAsia and Lion will remain by a large margin the largest players in the Southeast Asian LCC market, accounting for over half of the total fleet and over half of the total seat capacity. Both AirAsia and Lion are also now among the largest four LCCs in the world – a remarkable accomplishment given that Southeast Asia only accounts for less than 6% of the global fleet.

AirAsia is still larger than Lion based on capacity and fleet size, but only when considering AirAsia and AirAsia X as one entity (technically they are separate groups although they share a brand, website and distribution network). Also Lion is larger when also counting Batik but for this report Batik is excluded because it is positioned as a full-service carrier and has a separate brand.

Global top 10 LCC groups ranked by seat capacity: 19-Jan-2015 to 25-Jan-2015

Rank Airline Group Total Seats
1 Southwest Airlines Co. 3,287,734
2 Ryanair 1,610,280
3 AirAsia/AirAsia X Groups 1,330,774
4 Lion Group 1,243,712
5 Gol 1,160,288
6 EasyJet plc 999,888
7 Jetstar Airways Group 762,646
8 JetBlue Airways 760,878
9 IndiGo 711,720
10 Azul 578,669

Southeast Asian LCC groups fleet size and orders: as of 1-Jan-2015

Rank Airline Group number of

carriers

 number of

aircraft

aircraft

on order*

1 AirAsia/AirAsia X Groups 7 190 415
2 Lion Group 4 163 549
3 Cebu Pacific Group 2 52 40
4 Citilink (Garuda) 1 32 47
5 Jetstar Group 2 26 0
6 Tigerair Group 1 24 37
7 Nok 1 24 17
8 VietJet 1 18 61
9 Scoot 1 6 20
10 Golden Myanmar 1 3 0
TOTAL 21 538 1,186

One thought on “CAPA Analysis: Southeast Asia LCC Fleet To Grow By Only 13% in 2015

  1. Hundley has put up good offensive numbers over his career, and, likely won’t make very much money.
    losest the Bulls have gotten to making the finals since they won their last title in the 1998 season.
    The turnovers also greatly affected Cleveland’s offense as they only shot 34% from the field, and had 91 points, way below their playoff averages.

    The game in Calgary last Monday night was one of, if not the best-played game by the Arizona Coyotes this season.
    Yes, it?€?s unfortunate that Brian Hoyer is sidelined with a concussion, but Yates played very well against the Jets during his previous start.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s