updated 1/3/2007 11:22:37 AM ET 2007-01-03T16:22:37

The proliferation of budget airlines across Asia has made air travel affordable for millions, but this week’s aircraft disaster in Indonesia has underlined the challenge for governments to ensure safety standards are met.

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Analysts say there is no hard evidence that budget airlines are more accident-prone than full-service carriers, but admit they have a harder job convincing the public they are not cutting corners as well as costs.

The biggest challenge, they say, is for government and regulatory agencies to ensure that infrastructure and safety norms are sufficient to meet a surge in demand for air travel.

“The rapid growth in aviation is creating problems because infrastructure is inadequate and regulation has not kept pace ... it’s got nothing to do with the business models of airlines,” said Gautam Roy, an analyst at Edelweiss Securities.

“The onus is on the government and regulators to deal with the situation.”

Low-cost carriers had 17 percent of the total number of scheduled seats on offer worldwide in 2006, up nearly 16 percent from the previous year, according to travel data firm OAG.

Low-cost carriers had 24 percent of seat capacity in Europe and 9 percent in Asia Pacific in 2006. In Asia, seat offer and frequency rose 55 percent on the year, OAG said.

Governments have struggled to cope with the rapid changes.

Thailand only recently opened a new airport to replace its aging single-runway airport, while in India, steps to modernize overburdened airports have been painfully slow and hampered by protesting airport workers and communist allies.

But while pioneer Deccan Aviation’s inaugural flight was grounded, discount carriers in India have a good safety record.

“Because we cut costs it does not mean we cut corners,” said Ajay Singh, a director at budget carrier SpiceJet Ltd.

“In fact, since budget carriers are newer, our fleets and crews are newer than full-service carriers.”

Certainly, more technical snags have delayed aircraft operated by state-owned Indian, which has struggled with an aging fleet for more than a dozen years.

New airlines including Kingfisher Airlines and budget carrier GoAir have also been quicker to adopt technology like CAT-III systems to enable them to fly in fog.

Psychological factor
The missing Adam Air plane is the latest in a series of incidents involving budget carriers in Indonesia.

Elsewhere in the region, Malaysia’s AirAsia, the region’s largest budget carrier with a fleet of 50 planes, and Seoul’s Hansung Airlines have had burst tires and bad landings. No one was injured in any of these incidents.

Still, these instances, along with cases of misleading advertising and poor customer service, have generally given rise to the perception that discount carriers are less safe.

“There’s definitely a psychological factor that goes against low-cost carriers,” said an analyst who declined to be named.

“We tend to feel: they’re cheaper, so they must be cutting corners. So while there is nothing prima facie to suggest they are less safe than full-service carriers, they do have to work harder to disprove the general perception.”

Travelers have also been quicker to damn newer Asian budget carriers than their European and American counterparts including Ryanair, easyJet and Southwest Airlines.

“In many cases criticism has come from first-time travelers who expect too much and are quick to criticize,” said Kapil Kaul, chief executive of the Centre for Asia-Pacific Aviation in India.

Still, there are concerns about the sharp contrast in the fatal crash rates between large, first-world airlines and small ones in developing countries.

In Africa and the Middle East, the rate of fatal accidents — which is falling globally — was higher in 2000-2004 than 1995-1999.

The International Air Transport Association (IATA) is pushing airlines to sign up to the IATA Operational Safety Audit for best practice in maintenance and operations by December 2008.

Budget carriers may have to go the extra mile.

“They’re going to have to share more information with the public to offset any negative perception — and it’s only a perception — of safety standards,” Kaul said.

Copyright 2012 Thomson Reuters. Click for restrictions.


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