With the recovery of the global aviation market and lower oil prices, many airlines have renewed hope. However, the low-cost airlines in Southeast Asia are different, and some are still subject to a variety of unfavorable factors, and it is difficult to get out of the predicament.​​

When it comes to low-cost airlines in Asia, AirAsia is the leader. As the largest low-cost airline in Asia, it not only owns AirAsia X and Thai AirAsia X, which specialize in long-haul routes, but also has six subsidiaries including AirAsia Malaysia, AirAsia Thailand, and AirAsia Indonesia. Of course, the low-cost airlines that are developing rapidly in Southeast Asia include Scoot, Tigerair and Cebu Pacific.

However, we are now also seeing a slowdown in the expansion of low-cost airlines in the Southeast Asian aviation market. Not only that, the vast majority of low-cost airlines have also suffered losses.

According to the financial report of Southeast Asian Airlines from January to September 2015, 10 of the 19 listed companies and their subsidiaries have operating losses, and 5 of the airlines with operating losses are from the AirAsia Group. In addition, Tigerair and NokScoot also made the list of operating losses. On the contrary, some traditional airlines such as Singapore Airlines and Philippine Airlines have achieved higher operating profits.

In fact, from the perspective of the general environment of the global aviation market, with the recovery of the economy and the decline in oil prices, many airlines have experienced turnarounds to varying degrees. But why is the once dynamic low-cost airline in Southeast Asia experiencing massive losses at this time?

In the opinion of some industry insiders, the disorderly expansion of capacity is the key to the ills. Relevant data show that in 2013 and 2014, the capacity growth rate of low-cost airlines in Southeast Asia was 30% and 14% respectively, while the growth rate in 2015 was still 9%. Obviously, this speed of capacity expansion not only makes the already backward aviation infrastructure in Southeast Asia more stretched, but also further intensifies competition, resulting in increased costs and reduced revenue.

However, the author believes that this should only be a superficial phenomenon. This view does not well explain why, after low-cost airlines have the market initiative, traditional airlines are not only not affected by capacity growth, but have a new start in the market.

In fact, as early as around 2013, AirAsia and other low-cost airlines have felt the pressure of increased capacity and market competition. In order to attract more passengers and increase revenue, many low-cost airlines have successively increased additional service charges, changed cabin classes, joined the GDS sales network, and engaged in belly cargo transportation. These seemingly inadvertent actions reflect the embarrassment of the development of low-cost airlines, and deviate from their operating principles of low fares, fast and efficient.

Of course, these measures do help to a certain extent. However, that doesn't fundamentally change its current fortunes and get out of the way, as rivals could easily follow suit. As the market recovers, maturity and good service can still win the favor of many travelers. Therefore, now the low-cost airlines in Southeast Asia are not losing in the fierce competition, but in the market choice. They have given up the tradition of starting small in the market and then continuously improving performance, so that it is difficult to find new market opportunities in the end.

In the financial reports from January to September 2015, although Malaysia AirAsia and Cebu Pacific both achieved good results as low-cost airlines, the latter performed more prominently. Its operating profit from January to September 2015 increased significantly compared with the same period in 2014, an increase of 240%. The company carried 18.4 million passengers in 2015, an increase of 9% year-on-year; its biggest highlight was the rapid increase in long-haul passengers, an increase of 146% year-on-year.

Why is Cebu Pacific so profitable? In fact, there is no other, that is, the company has adhered to the consistent strategy of low-cost airlines - "seeing the needle" to find new markets. First of all, in order to solve the problem of less flight slots, Cebu Pacific temporarily put long-range wide-body Airbus A330 aircraft on short-haul routes to increase the supply of seats; in the future, it will gradually purchase Airbus A321neo aircraft to replace the current air Passenger A320 aircraft, increasing the number of seats to 220. Secondly, with the advantage of short-haul routes, the company opens up long-haul routes and forms a network. Finally, Cebu Pacific also avoids large hub ports and builds new hub ports to attract more low-end passengers and form a differentiated competition with Philippine Airlines.