LAST UPDATED : 2010-09-02 13:41:17 GMT+7 









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Is budget better?

Cheryl Tan
The Straits Times
Publication Date : 20-07-2010

File photo/The Straits Times

About six years after budget airlines made regional air travel more accessible to the masses, they are looking to shake things up again.

The likes of Tiger Airways, Jetstar Asia and AirAsia are no longer satisfied with plying regional routes to destinations up to four hours away.

They are challenging full-service airlines by offering lower fares to destinations even farther away on fares that are at least 40 per cent cheaper.

Malaysian-owned budget airline Air Asia paved the way in March last year when it launched AirAsia X, which flies to London's Stansted airport and also to India.

In April, Tiger Airways announced plans to fly to two more destinations, Tiruchirappalli and Trivandrum, in India, in addition to its current flights to Chennai and Bangalore.

Air-ticket sales have already started for the two additional flights that will start in November.

Recently, Jetstar Asia launched three new routes to Osaka, Melbourne and Auckland, its first long-haul routes out of Singapore.

Pay less, travel farther - what great news for travellers across all demographics. Or is it, really?

Some people are finding that when it comes to travelling, cheaper is not always better.

The cheap no-frills fares offered by Jetstar Asia made it possible for recent graduate Wong Jingwei to afford a community service trip to a village in Cambodia in May, followed by a graduation holiday to Viet Nam, Thailand and Taiwan right after that.

But the 25-year-old and his group of 33 friends were told only upon reaching Changi airport before dawn that their 6:45am flight to Phnom Penh had been cancelled "due to a technical glitch". Instead they flew more than 12 hours later at 7:55pm.

He said: "We had planned to reach Phnom Penh early in the morning and travel immediately to the village more than two hours away. Because of the delay, we had to find overnight accommodation in the city."

After the community service trip, he was again unlucky to find himself twiddling his thumbs in an airport for eight hours. His AirAsia flight from Viet Nam to Thailand was delayed.

His graduation holiday sure got off to a bad start.

When Life! contacted Jetstar Asia to verify Wong's case, the budget airline said the cancellation was a planned schedule change that had been made in March.

It explained that while other passengers on the plane were contacted about the change in flight details via a combination of e-mail, SMS and phone calls, Wong's group was inadvertently left out.

The airline's spokesman said: "We have identified one group which unfortunately was not informed of this change and arrived for a morning departure. This is not a common occurrence and we are extremely apologetic to the group affected. We will honour our obligations under the Jetstar Customer Charter with these customers."

According to the Jetstar's Charter, if the carrier breaches its commitments to its passengers, it will provide customers with travel vouchers of up to S$100.

Wong is not alone with his complaint about low-fare carriers.

The Consumers Association of Singapore (Case) received 238 complaints about budget airlines last year, up from 168 cases in 2008.

The complaints were related to flight delays and terminations without notice, as well as unsatisfactory service relating to luggage claims and refunds.

Tiger Airways received the most number of complaints, with 122 cases last year. Jetstar Asia had 73 and Air Asia, 35.

Case's executive director Seah Seng Choon says the spike in the number of complaints is due to an increase in demand for budget travel.

At the Changi Airline Awards announced last week, budget airlines Tiger Airways, Jetstar Asia and AirAsia made it into the top 10 list of airlines carrying the most number of passengers flying in and out of Singapore last year.

It was the first time AirAsia made the list, edging out full-service airline Thai Airways, and also the first time three budget carriers have made the list.

Other carriers that made the top 10 were Singapore Airlines, SilkAir, Emirates, Qantas Airways and Cathay Pacific.

Tiger Airways also beat full-service airlines in the region to emerge as the airline with the highest growth in passenger numbers among Singapore-based carriers.

Its spokesman Charles Sng said passenger numbers grew by 53.8 per cent from 3.2 million to 4.9 million in the airline's previous financial year, which ended on March 31.

According to Gary Ho, a lecturer in aviation management and services at Temasek Polytechnic, the more affordable prices now offered by full-service airlines are the result of competition from low-cost carriers.

"If you compare fares from the pre-budget days to those today, they have come down in any market that budget carriers have started flying," he said.

He added that available fares for regional sectors such as the Singapore-Kuala Lumpur and Singapore-Bangkok route have dropped by as much as 75 per cent.

Qantas, which co-owns Jetstar, noted that the success of low-cost carriers has stressed "the need for all carriers to really focus on their costs to ensure they remain competitive".

Its spokesman said: "There is no doubt that low-cost airlines have changed the economics of our industry."

Travel agents such as CTC Holidays and Chan Brothers Travel are also leveraging on the cheap fares by bundling up low-cost package deals for travellers.

CTC said at least 20 per cent of its travel packages are partnered with budget airlines.

Its spokesman Alicia Seah said: "Budget carriers are growing stronger day by day and will be a threat to the incumbent carriers."

Aviation expert Ho explained that budget airlines are able to offer low fares because of their frugality and cost-conscious methods. For example, they might cancel a flight rather than fly with a near-empty plane, resulting in sudden flight changes, he said.

Low-cost carriers also "maximise the lifespan of the aircraft" by loading it up with passengers for a return trip as soon as they finish with disembarking arriving passengers.

Ho said: "If there's a delay of just five minutes for every flight, it tends to snowball and affect the punctuality of the airline's flights for the rest of the day."

Slower and poorer service may be inevitable as budget airlines have less resources to hire more call-centre employees.

Ho said full-service airlines "tell you 'no' nicely after 45 minutes of listening to you". Budget airlines, he added, adopt a more "matter-of-fact" approach.

But budget airlines are working hard to improve their service.

In January, Tiger Airways started sending its cabin crew for service excellence courses, which were partially funded by government grants.

It also appointed a new call-centre service provider in April in an attempt to reduce call waiting time to 20 seconds.

Jetstar Asia recently invested in a new Jetstar Way training programme for 400 of its call-centre staff at its telephone reservation centre, which receives more than 10,000 calls a day. It is now equipped to handle inquiries 24 hours a day, every day.

It also introduced the Jetstar Customer Guarantee in February. This includes a commitment to ensure customers are informed of delays and cancellations as early as possible, and provided with alternative arrangements when their flights are no longer available.

The airline also promised to acknowledge complaints within 24 hours of receiving them and process complaints and refunds within 15 working days.

AirAsia did not respond to queries before press time.

If budget airlines are offering longer and cheaper flights as well as better service, do full-service carriers have to worry?

Not necessarily.

Chan Brothers Travel spokesman Jane Chang said 95 per cent of its travellers still opt for full-service carriers over budget carriers, unless there is no better alternative flight to the destination of their choice.

She is referring to the recent launch of budget airlines flying to Macau, Shantou and Shenzhen, destinations which most full-service airlines do not fly to.

Moreover, she pointed out that travellers do not mind paying slightly more for a full-service experience, especially if the budget carrier fares "differ only marginally" during peak periods.

Singapore Airlines vice-president Nicholas Ionides is confident that the brand's long time emphasis on service, innovation and network will continue to help differentiate it from the competition.

At the same time, he said: "We keep a very keen eye on our operating costs as we always have and are constantly identifying ways to trim our cost base without compromising on the products and services offered to our customers."

A British Airways spokesman said flying with a full service and paying all-inclusive fares means "you don't get hit with any additional costs for checking in at the airport, food and drink onboard or baggage allowance".

"Although the lead-in price for some budget airlines is sometimes lower than ours, they often only offer a limited number of seats at that price," she added. "And flying with a budget airline on short notice can become more expensive than flying with a full-service carrier."

Nevertheless, it seems budget airlines are here to stay, whether full-service airlines welcome the competition or not.

HR consultant M.L. Seah said she enjoys travelling on budget airlines when she flies three to four times a month for work.

The 48-year-old travels frequently to Hong Kong, Macau and Bangkok for business on Tiger Airways and said she usually pays S$30 more for a seat with legroom at the front and almost always gets her choice seat even when she books just two to three weeks in advance.

"If you book too late on full-service airlines, you get the perks but you get squashed somewhere and may not get the seat that you want," she said.

"You also don't feel you have to eat onboard because you're paying so much."

But she admitted her expectations are lowered the moment she books a budget flight.

Seah, who has travelled first class on full-service carriers, said with a laugh: "I always tell myself that this is not our national airline and to accept that it is no-frills."

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