Transport Airlines

China Airlines and Tiger Airways Are Launching a Budget Airline in Taiwan

Dec 16, 2013 3:00 am

Skift Take

Airline competition in Asia is really heating up in the low cost carrier sector, and obviously some of these new entrants are not going to make it over the long term.

— Dennis Schaal

Discover the Top Travel Brands on Social Media

China Airlines Ltd. and Tiger Airways Holdings Ltd. will set up a budget airline in Taiwan amid rising travel demand in Northeast Asia.

China Airlines will own 90 percent of the venture, with Tiger holding the remainder, the companies said in separate statements today. The new carrier, to be named Tigerair Taiwan, will have capital of NT$2 billion ($67 million), Singapore-based Tiger said.

Tiger joins AirAsia Bhd. and Qantas Airways Ltd.’s Jetstar unit in setting up low-cost carriers over the past year, as Asian discount airlines’ traffic has tripled since 2008, according to data compiled by Bloomberg. Taiwan expects two budget carriers including Tigerair and an airline of Transasia Airways Corp. to start operations next year, Taipei Times reported today, citing the island’s Civil Aeronautics Administration.

“The new JV will allow us to extend our presence into the new, untapped markets of Taiwan, Japan, and Korea,” Koay Peng Yen, Tiger Airways’ chief executive officer, said in the statement. “There is vast potential for growth in these markets and also areas of synergy to be explored between the two airlines.”

Thailand’s Nok Airlines PCL and Singapore Airlines Ltd.’s Scoot budget carrier also plan to set up a Bangkok-based low-cost airline, Scoot said in an e-mailed statement today. The initial investment will be 2 billion baht ($62 million) or S$80 million, the companies said, with Nok holding a 51 percent share and Scoot holding 49 percent.

Singapore Air is also Tiger Airways’ largest shareholder with a 33 percent stake, according to data compiled by Bloomberg.

China Airlines, Taiwan’s largest carrier, gained 0.5 percent to NT$10.70 as of 9:17 a.m. in Taipei trading. Tiger rose 3 percent to 51.5 Singapore cents.

Passengers flew 114 billion kilometers on Asian budget airlines in 2012, rising from 37 billion in 2008, data compiled by Bloomberg show.

–Editors: Lena Lee, Terje Langeland

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

Tags: , , ,

Next Up

More on Skift

Northstar Travel Media Continues Buying Spree, Buys Mountain Travel Symposium
How Tech Changes Everything: Sabre Employees Live Tweeting Their IPO With Its Own Hashtag
Daily Travel Startup Watch: Trevolta, Proper Swap and More
How to Find the ‘Holistic Traveler’ Trapped in Your Data

We're the Moneyball of the Travel Industry

We know what's coming next in travel. Subscribe to the newsletter and get all the goodness in your inbox daily.