The disappearance of AirAsia flight QZ8501 is unlikely to dent long-term demand for the airline's cheap fares, aviation experts told CNBC.
"It's not Armageddon. There will undoubtedly be short-term apprehension in demand, but air travel will bounce back, just like it does from terrorism attacks," said K Ajith, director of Asia transport at UOB Kay Hian on Monday.
CIMB echoed that view, saying demand for AirAsia operations in Indonesia, Thailand and Malaysia will likely only see a sharp fall in the following three months. "Unless there is a second incident in the very near future, the AirAsia group's strong safety track record and very attractive commercial offerings may help limit the contagion and ensure a speedier demand recovery," the bank said in a note on Monday.
A representative at the Air Asia sales counter at Singapore's Changi Airport told CNBC on Sunday that there had not been mass cancellations following the news and that people were going ahead with their trips.
The Indonesian transportation minister has stated that the government will be reviewing the airline's Indonesian operations.
Flight QZ8501 vanished from radar screens early on Sunday local time after departing from Surabaya, Indonesia's second-largest city. The Airbus A320-200 aircraft was operated by Indonesia AirAsia, 49 percent owned by Malaysian low-cost carrier (LCC) Air Asia.
The group, which has subsidiaries across Southeast Asia, is one of the region's most popular budget carriers due to its year-round low-cost fares, but Sunday's tragedy is set to be a test of leadership for CEO Tony Fernandes, who enjoys celebrity-like status in the region and is often compared with eccentric Virgin boss Richard Branson.