Impact of low cost airline on malaysia

The Low-Cost Airline Sector in Malaysia 7 4. Impact of Low-Cost Airline on Tourism Development in Malaysia 7 4. Positive Impact of Low-Cost Airlines 7 4. Negative Impact of Low-Cost Airlines 9 5. Impact of Low-Cost Airline on Airline/Transport Operations 10 6. The Malaysian government has been strategizing on how to increase tourism in the country which in turn has yielded positive results. At the moment, tourism is defined as one of the largest source of foreign exchange since 2009. Tourists seeking holiday scenes are easily satisfied with the islands and beaches found in Malaysia. Due to the availability of tourist attractions sites, or rather resources, the government developed the Malaysian Tourism Promotion Board that was instituted in 1992, (Malaysia Tourism Promotion Board, 2018). The basic purpose was to market and promote Malaysia through campaigns and advertisements, (Anna Aero, 2018).

The second product is the Malaysian culture, the mingling of different traditions of people from Malaysia has given birth to peculiar cultural traditions and practices that have now become one of the tourism product that people travel to experience and be part of. Sarawak Cultural Village is an iconic landmark that represents the Malaysian culture. This site is located at about 34 kilometers north of Kuching. A celebration of cultural heritage has had a great impact in influencing tourism in Malaysia, (Vidhusekhar, 2012). Food is also one of the tourism product that has gained audience globally. Basically, the size of the low-cost airline sector increasing each year as Malaysia is continuing to not only be an economic hub, but it is also boasting on the tourism industry that has largely support the sector.

However, the customers that board the low-cost airlines are presumably different from the customers that prefer full-service airlines. The size of the low-cost airline is expanding as the potential customers are satisfied by the services they get and prefer coming back for the repetitive purchase of the packages offered, there are two operators in the low-cost airline sector in Malaysia; AirAsia and AirAsia X airlines. These low-cost airlines are operated from the Kuala Lumpur International Airport, (CAPA, 2014). The AirAsia X Berhad has a fleet size of 23 and according to research done in 2015, the airline has created about 2,800 job opportunities. Low-cost airlines have influenced tourism demand and supply in Malaysia. This is evident in cities such as Malacca where tourists are flooding to experience the food and culture as some of the tourism products being offered there.

The low-cost airline has influenced the development of the economy by creating a platform where the demand for tourism services has gone high due to the inflow of tourists from other regions of Asia. Tourism has developed positively due to the low-cost airline that provides cheap means of airline transport compared to full-service airlines. Figure 1. Market Trend of Low-Cost Airlines (Source OAG Schedules Analyzer Data) 4. Negative Impact of Low-Cost Airlines Due to the increase in the number of tourists visiting Malaysia, there is a high demand for products and services. In 2017, 15% more tourists jetted into Malaysia and this posed a problem is accommodation facilities. According to the current status on tourism management sectors, each year, the industry needs to factor in 5% increase is accommodation facilities due to an ever-increasing population of the country and tourists, (Mustapha et al, 2013).

The low-cost airline has a negative impact on the tourism sector since there is no enough destinations and facilities to accommodate the tourists. Figure 3. Tourism Market (Source OAG Schedules Analyzer Data) The transport operations are now smoothly managed by installed systems that strategically assign passengers to their flights, (Francis et al, 2007). Domestic availability of planes has boosted the economy of the country by 13%. Despite the positive impact of low-cost transport ion the transport operations, airports are now congested as the low-cost airlines have ordered more than 100 aircraft. This has a negative impact on incoming flights since space is becoming limited in airports such as Kuala Lumpur, (Mustapha et al, 2013). Malaysia and China have similarities of the low-cost airlines since the Malaysian low-cost airlines are linked to some cities of China such as Beijing and Guangzhou.

The availability of connecting flights creates an opportunity platform for the growth Malaysian tourism sector. The future opportunity presented by the linking flights between Malaysian and China cities, significantly impact the economy of Malaysia as it increases foreign exchange and revenue. Figure 5. Asian Market Share of Low-Cost Airlines (Source OAG Schedules Analyzer Data) However, the main challenge that is presented competition. The Malaysia economy is depended on the tourism sector that is being facilitated by the airline and transport sectors. However, limited destinations and boarding facilities such as accommodation impact the tourism industry. The Malaysia government strategically developed policies that helped in boosting tourism in the country. At the moment, Malaysia is ranked among top Asian destinations in the world. The availability of low-cost airlines has impacted the tourism industry by making it easy for tourists to access Malaysia.

Kuala Lumpur Airport's New Low-Cost Terminal Uniquely Aims to Be a Model of Connectivity Part 2. Retrieved January 6, 2019, from https://centreforaviation. com/analysis/reports/kuala-lumpur-airports-new-low-cost-terminal-uniquely-aims-to-be-a-model-of-connectivity---part-2-171795 Francis, G. et al. The transferability of the low-cost model to long-haul airline operations. my/statistics Mustapha, M. et al. Service quality dimension of low-cost airline in Malaysia.  Hospitality and Tourism, 193-197. Vidhusekhar P, V.