Asia Aviation continues to play a formidible role in the World of Aviation.
Let's look into Eastern Asia Aviation (Hong Kong, South Korea) Part two.
Hong Kong
Hong Kong’s aviation market is dominated by Cathay Pacific. Although Hong Kong Airlines seeks to mount significant competition against Cathay Pacific, they lack the solid financial footing and funding (at least publicly) to significantly compete against Cathay.
Cathay Pacific keeps growing. Between separating long-haul and low-cost operations to acquiring HK Express, Cathay still has a major hold over Hong Kong. However, by 2050, Hong Kong Airlines could also be a formidable force of its own. Already, they operate long-haul services to major destinations. However, they will need to offer additional connections and partners to bring more passengers on-board their planes.
Hong Kong is already a well-known destination. With both high-end business travelers and leisure travelers, Cathay Pacific seems well on its way to staying afloat. However, if Cathay Pacific does have to contend with the rise of low-cost carriers in East Asia, things could become trickier in future.
South Korea
South Korea is home to two major airlines: Asiana Airlines and Korean Air. Despite an East Asian boom, South Korean passengers haven’t grown to the size of Japanese or Chinese numbers. On the other hand, South Korea remains well-connected globally.
Asiana is struggling financially and cutting their operations . Time will tell how this turns out for Asiana. In a best case scenario, their cost-cutting mechanism could turn things around. On the other hand, they may end up like Etihad, stripping back services to maintain profitability, or go completely bust like Jet Airways.
Korean Air, Asiana’s main rival, has avoided negative headlines about their financials. While Asiana cuts routes, Korean Air has expanded to new destinations– including some lesser-known places like Croatia.
As the national flag carrier, Korean Air is likely to outlast Asiana Airlines. While they have a long-haul network that ranges from quirky destinations to high-demand cities, Korean Air will likely remain flying as Seoul remains a hub for modern-day technology and tourism. With ties to large, global corporations, Korean Air will have a strong base of premium passengers looking to go to and from Seoul.
The rise of low-cost carriers
Where there are passengers wanting to travel, there is competition. Among carriers, the competition ranges from who offers the best onboard product to who offers the best fares. On the high-end, where airlines make most of their money, they compete with onboard hard and soft products. At the other end of the spectrum, the price-conscious passengers have led to the rise of new competition: low-cost carriers.
From Japan Airlines, we have “ ZIPAIR “, a to-be-launched long-haul low-cost carrier. Meanwhile, ANA went with a more traditional short-haul low-cost carrier in Peach.
In recent years, low-cost carriers have sprung up across East Asia. However, they have not grown to the likes of Ryanair and Southwest. That isn’t to say that low-cost carriers won’t catch on like they have in other markets. However, with China as a major growing market, China seems like the most likely contender to grow a major low-cost carrier.
The Chinese aviation sector is heavily marketed, which could prove to be a hindrance to the rise of low-cost carriers. However, the liberalization of air markets is a major trend in the aviation industry. This could be a major change in China’s future. The results could be beneficial for passengers who receive more options and connections on more carriers.
Overall
East Asia is a fascinating market. Coupled with high-demand tech cities and growing tourism, the market will continue to evolve in years to come. As markets grow, some airlines may inevitably grow too fast and go out of business, while others will thrive and could become global competitors.