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Published on September 18, 2007

"Passengers on low-cost airlines will worry about safety and security measures after the crash," a source in the aviation industry said, adding that these airlines were now suffering from a bad image.

Though all airlines are insured, travellers need full assurances about safety, the source said. He urged airlines and authorities to provide more information, particularly about the condition of aircraft, service standards and pilot qualifications. "I think people need to hear about the standards of low-cost airlines, from agencies and operators, before they start boarding their planes again," the source said.

The crash pushed down the share price of Malaysian budget carrier AirAsia as analysts said travellers were likely to shun

flying due to safety concerns. At close of trading yesterday, AirAsia fell 0.05 ringgit, or 2.6 per cent, to 1.85 ringgit (53 US cents) while the Kuala Lumpur composite index was down 0.9 per cent.

OSK Investment Bank said the Phuket crash would affect low-cost carriers, particularly after a similar crash in Indonesia in January involving budget airline Adam Air.

AirAsia has a 49-per-cent stake in Thai AirAsia, one of three budget airlines operating in Thailand.

"Although Thai AirAsia has not suffered a significant incident of this nature, we believe it will be affected as well, and it will reduce its fares in an effort to sustain its load factor," OSK said.

MIMB Investment Bank head of research Pong Teng Siew said that in the short term passengers would be suspicious of budget airlines, although this was unlikely to last.

"People might get a little worried now after the One-Two-Go crash," he said.

"Generally, AirAsia has a good reputation and no record of problems, so there will be little impact on the company in the longer term, " he said.

Srihaphan Chumsai, deputy CEO of low-cost carrier Nok Air, agreed. He said the incident would affect the tourism industry only in the short term.

"People might stop travelling on low-cost carriers, but not for a long time," said Srihaphan.

He added that the One Two Go accident could have happened on any airline, not just a low-cost carrier.

Tassapon Bijleveld, CEO of Thai AirAsia, declined to comment on the incident and its impact until further information was available from crash investigators.

Thai AirAsia and Nok Air are expected to gain from the incident because tourists will shift to these carriers if they cannot afford the more expensive fares quoted by higher-quality airlines like Thai Airways International.

Andrew J Wood, Asian Area director of development for the Skal International Council - an organisation that brings together all sectors of the travel and tourism industry - said the incident was shocking but added that flying was still the safest mode of transport anywhere in the world.

Phuket would suffer some short-term impact but the effect would be minimal, he said. Most travellers understood that the chances of the same type of accident happening again were minimal.

"Our estimate is that business will be off 3 per cent in arrival numbers as a result, but it should quickly recover as services normalise and the airport gets back on its feet," he said.

Suchat Sritma

 The Nation