Singapore Airlines to create no-frills offshoot

SINGAPORE Airlines is creating its own low-cost carrier to take on the likes of Jetstar, Air Asia and Tiger Airways for medium and long-haul routes in the Asia-Pacific region.

The new airline - whose name is yet to be announced - will be a wholly owned subsidiary and be based out of Singapore, it was announced late last night.

Its chief executive is expected to be recruited from Singapore Airlines, but the no-frills airline will be managed independently of its parent.

While Singapore Airlines has a 32.9 per cent stake in Tiger Airways, it has no day-to-day management of the carrier - Singapore Airlines considers it as merely an equity holding, a spokeswoman said.

The new no-frills carrier was likely to compete with Tiger Airways and other low-cost carriers in the region on some routes, the spokeswoman said. It will announce its routes later.

It will recruit pilots internationally and cabin crew will be employed from Singapore, open to those with Singapore work permits. The airline will use a wide-body fleet.

"As we have observed on short-haul routes within Asia, low-fare airlines help stimulate demand for travel, and we expect this will also prove true for longer flights," said Singapore Airline chief executive Goh Choon Phong.

"We are very excited about what our new low-fare subsidiary will offer to consumers. We see a new market segment being created and this will provide another growth opportunity …," he said. Singapore Airlines is yet to file for its Air Operator's Certificate but promises the airline will be up and flying within 12 months.

Singapore Airlines' announcement came after a report in the Australian Financial Review that Australian airline Qantas was planning to establish a new premium carrier based in Singapore.

Qantas would not confirm the report, dismissing it as speculation, but has said its international business had not been performing to expectations, with market share in this area falling in recent years.

with AFP