The Expedia group’s Global Tour & Transport team released the latest results of its Low Cost Carrier (LCC) Airline Index, a study conducted by Northstar that examined Asia-Pacific travelers’ attitudes towards LCCs. Spurred by LCC growth, supply in Asia-Pacific is expected to increase by 9.5% year-on-year during March 2015, great news for the 94% of travellers willing to sacrifice perks to save money, according to the study.
The Expedia 2015 Asia-Pacific LCC Airline Index polled approximately 3,200 travelers in Australia, New Zealand, Japan, South Korea, Hong Kong, India, Malaysia, Philippines, Singapore, Thailand and Taiwan, expanding on Expedia’s 2014 Western European LCC Airline Index studying the tradeoffs between fares and frills.
The survey examined perceptions regarding customer service and perks between LCCs and traditional carriers and asked about which sacrifices travelers were most willing to make to save money. According to the study, the most important deciding factor when choosing a carrier is the airline’s safety track record.
James Marshall, Sr. Director, Tour & Transport APAC highlighted that “according to the survey,‘saving money’ is ranked second behind ‘airline safety track record’ in terms of being most important when choosing the airline, across gender and age. Men are slightly more willing to sacrifice amenities to save money vis-à-vis women. While a traveler’s age does not make a difference in their willingness to make sacrifices when flying to save money, there are some key differences by age in terms of the sacrifices individuals are willing to make – those under 35 are more likely to give up legroom and carry-on luggage, while those 55+ are more willing to give up full meal service.”
[stextbox id=”custom” float=”true” width=”300″ bwidth=”7″ bcolor=”FF7438″ bgcolor=”F9FFA6″]Over the last 12 months, 51% flights Indians took were on LCCs when flying within Asia[/stextbox]
When flying outside Asia, LCCs accounted for 33% of the flights taken by Indian travelers
Vikram Malhi, Managing Director-Asia, Expedia said, “Despite being a highly cost sensitive market, Indians are one of the least willing to accept slightly lower level of customer service to save money (58%) on flights. The general thought behind flying a LCC is to replace their train tickets with a faster mode of travel or a trip with large number of people that could be friends or family.”
“A trend that we have seen with Indians is that some of them are choosing to fly LCCs and then using the money saved to upgrade their hotel/s for the trip”, he added.
Airlines used in the past 2 years?
• Indians rank 2nd highest of the APAC countries surveyed in terms of being most likely to have flown on a LCC, with 92% of Indians saying they have flown on a LCC in the past 2 years.
• In terms of specific LCCs, Indians are most likely to have flown on SpiceJet (67% have flown on this carrier in the past 2 years), IndiGo (65%), GoAir (38%). When it comes to international LCCs, AirAsia is most common, with 37% of Indians having flown on this carrier in the past 2 years.
Sacrifices to save money? Yes Please!
• Indians are the second least likely (behind Australia) to say they are willing to make sacrifices when flying in order to save money. Still, 91% of Indian travelers are willing to make concessions to save.
• In terms of what they are prepared to give up to save,Indian travelers are most willing to sacrifice in-flight entertainment (52%), full meal service (50%), pillows and blankets (45%), being able to choose seat in advance (46%) and snacks and beverages (43%).
• They are least willing to sacrifice bathroom privileges (18%), legroom (19%) and free checked luggage (23%).
• 78% Indian fliers think that they would receive much /somewhat better service on full service airlines while a strikingly low 7% think that they would receive much /somewhat better service on LCCs.
• Only 58% Indian fliers would be willing to accept a slightly lower level of customer service to save money, second lowest in APAC.
Fly LCC? Let’s replace a train ticket!
• Indians are most willing to consider a LCC to replace a train journey (67%, the highest of any APAC country). They will also consider LCCs to replace a bus journey (46%), for tripswith at least 3 family members for whom they are paying (45%), for a trip with friends (44%) and for trips to visit family & friends (45%).
• They are least likely to consider LCCs for a honeymoon (9%), a long-haul flight (15%) and company paid business trips (17%).
What’s important when choosing an airline?
• The most important parameter for Indian flierswhen choosing an airline is airline safety track record (29%), followed by saving money (17%).
• 41% of Indian travelers would consider a LCC for a flight time of up to three hours. For a flight approaching 5 hours, that figure drops to 27%, and tumbles thereafter. Only 9% of Indian travelers would fly a LCC for an 8 hour flight and only 2% would consider a LCC for a 16 hour flight.
Indians express equally strong safety concerns about full service airlines as they do LCCs.
• 25% of Indians strongly agree that they have safety concerns about LCCs, however, an equal proportion (25%), strongly agree they have safety concerns about full serviceairlines.
• Looking at the overall survey results, women express greater safety concerns about low cost and full serviceairlines than men.
o 72% of women agree they have safety concerns about low cost airlines vs. 65% of men
o 47% of women agree they have safety concerns about full serviceairlines vs. 39% of men
Last 12 months
• When flying within Asia, 51% of the flights Indians took in the past year were on LCCs. By contrast, when flying outside of Asia, LCCs accounted for 33% of the flights taken.
• Generally speaking, when flying within Asia, those under 35 have taken more of their flights on a low cost carrier than a full service airline (53% of their flights within Asia in the past year were on a low cost carrier and 47% were on a full service carrier).
• When flying within Asia, those 55+ took a smaller proportion of their flights on a low cost carrier than their younger counterparts (36% vs. 47% among those 35-54 and 53% among those under 35).
• Indians are the most likely of the APAC countries surveyed to have travelled for both leisure and business, with 52% Indian travelers having travelled for leisure and business in the past year.
• Generally speaking, men are more likely to have travelled on both business and pleasure in the past year (39% vs. 26% respectively).
• According to the broad survey results, those 55+ are more likely to have only travelled for leisure (72% vs. 57% for those under 35 and 55% for those 35-54).
Booking ‘Flight + Hotel’
• 41% of Indians say they often or always book their hotel and flight together as a package booking – the third highest of the APAC countries surveyed after Taiwan (53%) and South Korea (45%).
• 45% of Indians agree that when booking a flight on a LCC, they splurge on the hotel.
• The broader survey results show those under 35 are more likely than their older counterparts to splurge on a hotel with the savings from their flight.
o 53% of those under 35 agree that when they book a flight on a low cost airline they will spend more on a hotel vs. 44% of those 35-54 and 37% of those 55+
*Source: Goldman Sachs Analyst Report, Airlines In Pictures: Fundamentals to Focus on, February 26, 2015
About the Study
This study was conducted on behalf of Expedia by Northstar, a globally integrated strategic insights consulting firm. The study was conducted among 3,263 adults aged 18 years of age and older in Australia, New Zealand, Japan, South Korea, Hong Kong, India, Malaysia, Philippines, Singapore, Thailand and Taiwan who have flown in the past two years. Surveys were completed online from February 13 to 22, 2015 using the Kantar-owned GMI (Global Market Insite) and Lightspeed Research amalgamated group of panels. Sampling quotas and weighting were used to ensure the sample is representative of the APAC countries represented in terms of age and gender. Assuming a probability sample, the margin of error would be +/-1.7 percentage points, 19 times out of 20.
Musafir Namah Bureau