Internationally, AirAsia is facing competition from a multitude of LCCs in the South-East Asian region. The main competitors are Thailand’s Nok Air (owned by Thai Airways), Indonesia’s Lion Air, Tiger Airways (49% owned by Singapore Airlines) and Singapore-based Jetstar Asia and ValuAir, both of which merged in July 2005. At the moment, AirAsia is ahead of its budget competitors in terms of number of destinations served. ValuAir currently flies only to Jakarta, Bali and Surabaya whereas Nok Air concentrates on six destinations within Thailand. Tiger Airways and Jetstar Asia serve 12 and 10 destinations outside Singapore respectively. In comparison, Air Asia flies to 31 domestic and regional destinations. The region is considered to have a huge unmet demand for low-cost air travel, with demand being considered highly price elastic. In comparison to the United States and Europe, where LCC penetration is estimated at 24.5% and 16.0% respectively, penetration