Malaysian low-cost carrier AirAsia reportedly plans to spend
S$115m to set up an airline joint venture in Singapore and has
applied for an airline licence, further intensifying regional
competition.
"We have applied for an AOC," said AirAsia chief executive Tony
Fernandez, referring to the Air Operator Certificate from the Civil
Aviation Authority of Singapore, according to Reuters.
The AOC is required for airlines which want to be Singapore
registered carriers.
The report also quoted Mr Fernandez as saying he was in talks with
a few investors but the joint venture partners had not been
finalised.
AirAsia is joining a growing number of budget carriers intending to
operate from Singapore's Changi Airport, which has offered to build
a separate terminal for such airlines.
Singapore Airlines' Tiger Airways and ValuAir, run by former SIA
executives, are slated to begin operations this year.
AirAsia's Thai joint venture has already started operating flights
between Singapore and Bangkok with promotional one-way fares of
S$50, one-eighth of regular fares. - CNA
Veteran Warns Of
Failures
As competition heats up in Asia's aviation industry, Malaysia's
AirAsia says it plans to spend S$115m to set up an airline joint
venture in Singapore while Thailand's Nok Air, which is linked to
Thai Airways, is looking to fly to a number of Asian destinations
including Singapore sometime next year.
But even as these plans are being unveiled, an industry veteran is
warning that some budget carriers will fail.
The former chief of Singapore Airlines is already predicting their
demise, at least for some of them.
"I believe that low-cost carrier failures are inevitable given the
increasing number of new players and entry into the market, the
low-cost carrier arena of big boys with deep pockets like Singapore
Airlines and Qantas. In a bruising free for all, who do you think
will be the first to be depleted of cash? And, with the initial
failures of some low-cost carriers, will that deter potential
entrants into the market, leaving the field to the big boys?" said
Cheong Choong Kong, former CEO of SIA.
Mr Cheong said that it's the experienced players like SIA and
Cathay Pacific that'll still be around in a decade or two.
Still there's no stopping the proliferation of low cost airlines in
the region.
Indonesia's Lion Air is already touching down in Singapore, while
local start-ups ValuAir and Tiger Airways are gearing up to take
off soon.
And Thailand's Nok Air, which is launching domestic services out of
Bangkok in the second quarter of this year, could soon join the
pack.
Nok Air's chief executive Patee Sarasin said: "In the first phase,
we're actually looking at 6 destinations in terms of Phuket, Chiang
Mai, the traditional areas and looking at the market demands. We
haven't decided yet where the first flights are going to take off
to because it's still very much under consideration, but within the
12 months and if everything goes well in this first phase we call
domestic, we'll start moving to the region." - CNA