The markets in which LCCs have been most succesful have been the most deregulated, and currently Asia does not have that luxury. They trade in competitive markets, and in my view they ideally they need to be:
1. Free of bilaterals and other capacity/price constraints;
2. Free to move into and out of markets which are not proving succesful, in heavily regulated markets entering and exiting markets is not so simple;
3. In markets where competing airlines are not subsidised and held up by governments because these markets are distorted.
Other problems in Asia include the distances between major centres, and the result of this means that the major carriers tend to use widebodied aircraft, which offer economics that traditional low cost aircraft types simply cannot match. In addition the distances covered by these flights means that many passengers want complimentary food/drink/ents.
HOWEVER, I think there is potential in Asia for several reasons:
1. There is a growing middle class in many countries, which have growing disposable income, and an economic effect of that is the desire to travel;
2. The markets are gradually becoming more liberated, and will help meet some of the criteria in which I believe LCCs must operate.
3. The LCC model has been well proven elsewhere, in markets which had a lot of competitors, in Asia due to the regulated markets there is very little competition against flag carriers, and when deregulation takes place it should be boom time for the LCCs because there will be very little competition.
4. The surface transport infrastructure is very basic in many countries, and so air transport can offer a fast, relatively cheap alternative.
Hope this gives you a few ideas to think about. I can write more if you like.
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