Consolidation might solve some of Asia’s big airline issues

There is hope for Asia’s crowded skies. In much of the region, too many carriers, with too many planes, charging too little have left the industry on its knees, and put price controls back on the agenda. Consolidation offers a better fix. With Indonesia’s state-owned airline, Garuda, taking over a rival and India’s Jet Airways also potentially for sale, some relief may be near. The aviation excess seen in South and Southeast Asia has few parallels globally. In India, where the budget airline IndiGo now controls more than 40 percent of the market, the result has been bargain-basement prices. Millions of people have flown for the first time, but all the major locally-listed airlines posted net losses in the most recent quarter. Further east, low-cost upstarts are squeezing so-called flag carrier airlines, like Thai Airways. Overcapacity is one problem. The Lion group, which includes Indonesia’s Lion Air and others, has some 450 planes on order, according to the aviation consultancy CAPA, though deliveries have slowed. Vietnam’s VietJet has commitments for more than 320 aircraft, or roughly five for each in its current fleet, according to CAPA. Against this background, the crash of a Lion Air jet off the coast of Jakarta has caused Indonesia’s ministers to debate raising minimum airfares. Unfortunately, there is little evidence that higher prices can improve safety; rules were earlier tightened after a 2014 AirAsia crash. <br/>