NICHOLAS IONIDES / SINGAPORE
Tony Ryan among experienced outsiders brought in to add expertise to no-frills carrier
The fledgling low-cost airline market in Asia is heating up, with Singapore Airlines (SIA) preparing to launch a no-frills carrier in partnership with the founder of Ryanair and US investor David Bonderman's Indigo Partners.
The new airline will be called Tiger Airways and from the second half of 2004 it will operate a "substantial fleet" from Singapore's Changi airport to destinations up to 4h away. One type of narrowbody will be leased or purchased, but no selection has been made.
SIA will hold the largest single stake of 49%. while its parent company, Singapore government investment vehicle Temasek Holdings, will have 11%. Indigo Partners, the aviation partnership between Bonderman and Bill Franke, will hold 24%, while Irelandia Investments, owned by the family of Ryanair founder Tony Ryan, will hold 16%.
"Singapore Airlines and Temasek will own a majority of the new airline, but Tiger will be separately certificated and operated independently by a team specially recruited for the low-cost airline," says SIA.
SIA adds that as it "does not have experience with the low-cost carrier business model", it felt it was necessary to bring in outside shareholders "who have the right credentials and a relevant track record of success".
The low-fare segment of the market is in its infancy in Asia, but there have been recent developments. Malaysia's AirAsia has launched international services and is starting a joint-venture carrier in Thailand, where other low-fare airlines are being established - including by Thai Airways International.
In Singapore, a new privately owned carrier called ValuAir plans to launch services in the middle of 2004 with two leased Airbus A320s.
Ryan says Tiger can be a success despite the fact that the European low-fare carrier model cannot be directly applied to Asia, given bilateral air services rights issues and that there are fewer secondary airports near major cities. "Freedom of the skies evolves," says Ryan. "I think it will evolve in this region as well."
Source: Flight International
