The head of Malaysia-based AirAsia, Asia’s most successful discount air carrier, has forecast that other low-cost airlines will begin to move toward consolidation in an effort to save money.

Tony Fernandes said that some of the operators of these air carriers got into the industry because they thought it was an easy way to make money, but in the current climate they are finding that it is much more difficult to turn a profit than it looked.

And there are signs that Fernandes may be correct in his assessment. Just last week Valuair, which has been flying since May of 2004, and Jetstar Asia, two Singapore-based no-frills air carriers, announced that they were in talks that could lead to a merger.

Among the reasons that carriers such as Jet Star and Valuair, which has been branching out into offering longer routes and in-flight meals, are looking to merge are higher oil prices and leasing costs.

Rates for leasing the sorts of aircraft used on short- and medium-haul routes have climbed by as much as 40 percent in the past year due to demand that is exceeding supply.

Oil prices are going up on high demand, processing bottlenecks, and limited refining capacity. Last week in Singapore, for example, jet fuel was trading at $70.47 per barrel.