Low-cost carriers positioned to lead airline industry's recovery

Airlines are poised for a wave of consolidation amid a tough business environment exacerbated by the coronavirus pandemic, the head of one of Asia's biggest aicraft leasing companies said. Peter Barrett, CEO of SMBC Aviation Capital, said there are early signs of recovery in air travel demand in Asia and predicted low-cost carriers will lead the industry's recovery. "The strong will get stronger. The ones that do well will take market share. They are going to grow again in a couple of years," Barrett said in an interview. "Once flying returns, airlines are going to have to discount to get people back on aircraft. They are going to have to sell cheaper tickets to encourage and stimulate demand." Low-cost carriers have more ability to drive down costs than traditional airlines, he argued. There are early signs of recovery in air travel demand in Asia and parts of Europe, Barrett said. Data from aviation analytics company Cirium also shows that the pace of year-on-year decline narrowed to 35% in late May from 80% in February for China, and to 65% in late May from 75% in April for Asia-Pacific. "We are seeing some very small green shoots, I would say, in markets like Korea, Malaysia and Thailand and other markets in Europe," Barrett said. "What we are going to see over the next number of months is a slow, steady return of air travel. But it is going to take time."<br/>