China Airlines and Tiger Air team up for budget carrier


China Airlines Ltd. ?and Tiger Airways Holdings Ltd. (TGR) 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 , 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. (SIA)?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.

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

Source Bloomberg

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