China Airlines Ltd and Tiger Airways Holdings Ltd will set up a budget airline in Taiwan, hoping to capitalise on rising travel demand in Northeast Asia.
China Airlines will own 90% of the venture, with Tiger holding the remainder, the companies said in separate statements Monday.
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 - 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 (joint venture) 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 Plc and Singapore Airlines Ltd’s Scoot budget carrier also plan to set up a Bangkok-based low- cost airline, Scoot said in an emailed statement today. The initial investment will be 2 billion baht ($62 million) or S$80 million, the companies said, with Nok holding a 51% share and Scoot holding 49%.
Singapore Air is also Tiger Airways’ largest shareholder with a 33% stake, according to data compiled by Bloomberg.
China Airlines, Taiwan’s largest carrier, gained 0.5% to NT$10.70 as of 9:17am in Taipei trading. Tiger rose 3% 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.