Malaysian budget aviation group AirAsia plans to spend SGD$115 million (USD$69 million) to set up an airline joint venture in Singapore and has applied for an airline licence, its Chief Executive Tony Fernandez said on Thursday.
The allure of no-frills carriers to Asia’s growing middle class is ramping up pressure on flag carriers such as Malaysia Airlines, Thai Airways International and Singapore Airlines.
There had been some uncertainty whether AirAsia, which recently started flying between Singapore and Bangkok through a Thai joint venture, would apply for an Air Operator Certificate (AOC) to tap Singapore’s wealthy pool of regional travellers.
“We have applied for an AOC,” Fernandes said, which is necessary for airlines which want to be Singapore registered carriers.
Fernandez said he was in talks with a few investors but the joint venture partners had not been finalized.
Sources said the private equity arm of DBS Group, Singapore’s largest bank, has been looking at the venture but no decision has been reached.
AirAsia is joining a growing band of low-cost carriers in Singapore. Singapore Airlines is planning to launch Tiger Airways and ValuAir also plans to launch a similar carrier this year.
By: dan777 - 12th February 2004 at 23:51
The only low cost airline in the Middle East at the moment is Air Arabia (www.airarabia.com). In the future there is also suppossed to be some other new airlines including menaJet and TransGulf Express. All are based at Sharjah.
Regards
dan777
By: ACA345 - 12th February 2004 at 23:31
Thanks for the information. To me, it seems lo-co is becoming a major player in basically every part of the world. Comments anybody… Does the Middle East have any lo-co carriers?
By: steve rowell - 12th February 2004 at 23:08
Thai Airways International’s no-frills airline, Nok Air, said on Thursday it would launch services in June, heating up competition in Thailand’s low-cost market.
Patee Sarasin, chief executive at Nok Air, formerly Sky Asia, said it would lease two Boeing 737-400s from Thai Airways, which owns 39 percent of Nok Air.
“Thailand is a virgin market. There’s room for two to three low-cost carriers,” Patee said on the sidelines of a low-cost airline symposium by the Centre for Asia Pacific Aviation.
Patee said Nok Air — Nok means “bird” in the Thai language — would initially fly to six destinations in Thailand. “The pie is very big. There’s 65 million people in Thailand and only five million fly.”
He said that in the second year, he was looking to expand Nok Air’s flights possibly north of Thailand.
Two discount airlines, Thai Air Asia and One-Two-Go, are scrambling to lure new customers in Thailand with cut-price fares at roughly a third of regular prices.
No-frills carriers have recently sprouted in Asia. Malaysian budget carrier Air Asia has started flying between Singapore and Bangkok through a Thai joint venture, and is planning to set up an airline joint venture in the city state.
Singapore Airlines plans to set up a discounter, Tiger Airways, with the founders of European no-frills carrier Ryanair. ValuAir also plans to launch a similar carrier this year.
Industry analysts expect low-cost airlines to grow across Asia. “We are going to have lots of buses with wings in Asia,” said Peter Harbison, managing director at the Centre for Asia Pacific Aviation.
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February 12, 2004 at 11:05 pm