Oct 30, 2004
Counting the cost of a cheap flight
No soap, used tissues on seats would be OK with some if the price is right
By Karamjit Kaur
Transport Correspondent

I'M NOT a fussy traveller but I do expect some basics when I fly, which is not very often - maybe two or three times a year.

For example, if I want some extra time for duty-free shopping, it's nice to know my confirmed seat will be waiting when I board the aircraft.

If I'm travelling with family and friends, I'd like to sit with them, thank you.

When I use the toilet in the air, there had better be enough soap, tissue and toilet paper.

And I really don't fancy having to clear up other people's used tissues and empty mineral water bottles just because someone didn't do a good job of cleaning the aircraft.

You see, for me, a holiday is something to look forward to and the experience starts the moment I get into a cab and head for the airport.

So, yes, I baulked when I was handed the assignment of testing out the service of each of the three budget airlines. The idea of having to fight for a seat alarmed me.

So I was ready to give extra points not just for 'cheap' but, especially, for 'good'.

I would cross off Thai Air Asia immediately, because of the discomfort from being wedged in a stuffy bus between terminal and aeroplane. The other two airlines, thankfully, use aerobridges.

Fussy? Hey, I wasn't the only uncomfortable passenger looking to breathe well for 15 minutes.

If the price is right, I guess I can tolerate some discomfort.

After paying for food - Valuair provides a free meal but the other two airlines make you pay - the cheapest was Tiger Airways . I paid $140 (plus $15 more for food) for a round trip to Bangkok, excluding airport taxes and surcharges.

On AirAsia, the fare was $170 and food cost an additional $10.

Valuair was the most expensive at $220 for a round-trip fare - $65 more than the cheapest deal, counting meals.

Still, I would pay the difference to fly Valuair because I think the extra $65 - $32.50 per flight I paid for better service, a cleaner aircraft and more leg room - was worth it.

The seat pitch for Valuair is 81.3cm, while the other two airlines pack in more passengers per aircraft, so there is less space - 73.6cm.

Cheap airlines which clean their own planes are unlikely to find a customer in me. A mid-level carrier like Valuair probably will.

When I tested the three airlines, I also found the Valuair girls friendlier and willing to go the extra mile for passengers.

On the flight to Bangkok, the chief stewardess offered to help me check with airport ground staff on excess baggage charges. The stewardess for another airline merely suggested that I check with ground staff after landing. To me, such intangibles matter in making the flight a more pleasant one.

Still, I don't have a money plant growing at home so there is a limit to how much more I would pay for the extra comfort.

If it cost me $200 more to fly Valuair compared with the other airlines, then maybe I would put up with no soap in the toilets and used tissues on my seat cover.

After all, it's just a two-hour flight, right?

Bottom line is, every traveller is different. For some, cost is all that matters. Others want more.

It would be ideal of course if an airline could be both cheap and good, but from my experience, getting a combination of both is tough.

Clearly, airlines are not aspiring to be all things to all people either.

For Tiger Airways and Air- Asia, the mantra is low fares, low fares, low fares. They believe that for short flights of up to five hours, nothing else matters to the traveller.

So if aerobridges are too expensive, they'll put passengers on buses and get the cabin crew to clean aircraft. For a cheap ticket, passengers shouldn't be complaining that 'cleaners' miss a used tissue or two.

Valuair thinks differently. Singapore Airlines veteran Lim Chin Beng, who started the airline, is convinced that Asians especially, want more service and, in return, are willing to pay more.

He appears to be right.

AirAsia which has been around longer is more popular with Caucasians and its planes are full.

Having done all their market surveys and studies, the airlines are taking a gamble, hoping that they know the traveller best.

If more passengers were like me, then I guess we wouldn't mind paying a bit more for a bit more comfort. Just remember that, even as Asians enjoy a good flying experience, there's a limit to what we will pay for.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Competitors of budget airlines.......luxury coach.......

Business Times - 30 Oct 2004

Riding on air in Aeroline coach

By CHEAH UI-HOON

ONCE upon a time, there were 'Economy' bus services from Singapore to Kuala Lumpur, which then became Executive coaches, and which were followed quickly by Super and Super VIP categories. The novelty for 'luxury' coach travel then became double deckers but now, one Malaysian coach company has upped the comfort and gadget stakes for business travellers.

Aeroline's 'First Class' coach service has services that you won't even get on some airlines, like massage seats and power sockets for laptop use and recharging mobile phones. And what's more, the Scandinavian coach has quite a hip exterior (you'll notice motoring fans checking out the bus at pitstops on the North-South highway).

http://img93.exs.cx/img93/5043/uhaero-195702.jpg

Taking a coach from Singapore to KL has been the preferred mode for frequent travellers for some time now - especially when the coaches depart from a hotel (instead of the Golden Mile area), leave on time (so you can get to KL in five hours), and use the Second Link.

Media members got a feel of what Aeroline's First Class ride was like when we took a road trip in the black and yellow bus to KL last weekend. Instead of plush seats, Aeroline's are like executive armchairs. Automated controls are given out to passengers to activate the massage systems in the chairs, roughly halfway through the journey.

For cushier comfort, there are sofas you can sink into at the lower deck which has a working table and a surround-sound entertainment system - good for groups who want to watch a DVD of their choice, or just chat or play cards.

The journey took exactly five hours - and it arrived at the four-star Corus hotel, which is literally, a couple of minutes walk to Avenue K, the newest shopping mall in town (which is partially opened this month, and is directly linked to KLCC and the KLCC LRT station).

What's even better is, Aeroline will soon have direct services to Petaling Jaya as well, besides just downtown KL.

If you're wondering how Aeroline compares with the Nice bus service, which is quite popular for its consistent standards of service from KL to Singapore, Aeroline's nifty online booking system - the best seen for coach travel so far - is in real time, and really works.

Aeroline will show a movie or two on the journey, which is either a blessing or a bane - depending on the show, and whether you prefer a quiet ride or not.

The basic but yummy Malaysian fare you currently get in Nice coaches is worth my vote though, and Aeroline should really try to stick to that tried-and-tested standard if it wants passengers comparing its service to air travel, but not aeroplane food.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

November 03, 2004

Indon budget carrier eyes region

JAKARTA - PT Adam SkyConnection Airlines, an Indonesian budget carrier, aims to double its fleet as it plans to fly to international destinations such as Singapore and Australia next year, chief executive Adam Adhitya Suherman said.

The carrier, known as Adam Air, will double its fleet of Boeing 737 aircraft to six by the end of this year and expects to expand it to 12 next year, he said. It flies to eight cities in Indonesia and also to Penang in Malaysia from the Indonesian city of Medan.

"The domestic market is huge but we are looking to expand to Singapore and Perth," he said in an interview in Bangkok. Adam Air is partly owned by Mr Agung Laksono, the speaker of the lower house of Indonesia's parliament.

Adam Air wants a share of the air traffic to Bali, Indonesia's main tourist attraction. As many as 834,191 people visited Bali in the January-to-July period, 58 per cent more than the corresponding period of last year. Indonesia expects tourist arrivals to rise 16 per cent to 5.1 million this year.

Discount carriers such as Malaysia's AirAsia, Singapore Airlines' Tiger Airways and Indonesia's Lion Air have mushroomed in South-east Asia, a region with a population of 500 million people.

The Jakarta-based company plans to fly to Perth from Bali as well as to Singapore from Bandung by next year, Mr Suherman said.

"I see a good potential market to Denpasar, in Bali. Leisure travellers from Australia are always flying to Bali," he said. - Bloomberg

Copyright © Singapore Press Holdings, 2004. All rights reserved.

OMG budget airlines are now starting to pop up like pimples!

Low-cost carriers in trouble?

4 Nov 2004

HAS the proliferation of low-cost carriers (LCCs) in South-east Asia peaked? Is the industry headed for a shakeout? These are the questions which come to the fore as a combination of factors threaten the growth of mass market air travel in the region. Today, this region has about 20 LCC operators. Even so, these numbers are nowhere near those in Europe, where there are over 50 LCC operators. South-east Asia has about the same number of people as Europe but in a market that is largely untapped - only about 10 to 15 per cent of the region's population have travelled on a plane.

Now it looks as if a combination of factors could put the brakes on the growth of the industry. Protectionism is the most significant. The experience of Europe and the US shows that growth of LCCs has been largely fuelled by a conducive regulatory environment. The 1997 deregulation of the European skies, accompanied by Brussels' close watch over anti-competitive practices in the industry, drove the LCCs' 'growth phase' between 1998 and 2002. This has yet to happen in much of Asia. As a result, regional LCCs here concentrate largely on tightly regulated point-to-point routes such as Singapore-Bangkok, Singapore-Hong Kong or Singapore-Jakarta. Their relatively high exposure to such routes presents risks. For example, discretionary travellers avoided flying to Jakarta in the lead-up to the recent presidential elections. Similarly, there are fears that the problems in southern Thailand could impact on holiday traffic.



The second factor which is already hitting LCCs is high fuel prices. Jet fuel has soared some 60 per cent this year and remains stubbornly stuck at over US$60 a barrel. For LCC operators fuel accounts for about 40 per cent of expenses (compared to 20 per cent for legacy carriers.) High oil prices have already prompted the International Air Transport Association to raise its projected losses for global carriers this year to US$5 billion, from its earlier estimate of US$3 billion. While the prominent casualties of high oil prices have largely been legacy carriers, the recent collapse of US-based discount carrier ATA Airlines has proven that even well-run LCCs are vulnerable. But LCCs in this region have little choice but to press ahead with expansion plans. For many, gaining market share is critical at this early stage of the game. Many are counting on strong passenger traffic volume to cushion them from the full impact of rising fuel prices.

And that brings us to the third major threat for regional LCCs. The strong growth in passenger traffic is driven by buoyant economic conditions. But high oil prices will impact on the economies of the region at some point. The discretionary end of the travel market which drives the LCC industry could then see a slowdown.

LCCs operate on thin margins and fragile operating numbers. Many have little room to manoeuvre when the numbers change suddenly or dramatically. Still, it would be a mistake to conclude that the LCC revolution in this part of the world is in trouble. The revolution is irreversible. But a combination of high fuel prices, difficulty in penetrating new markets, overcapacity and economic slowdown could lead to a consolidation down the road.

AirAsia flies S'pore-Phuket route

8 Nov 04

(PHUKET) AirAsia is hoping to grab a greater share of the low-cost airline market with the introduction of flights between Thailand's resort island of Phuket and Singapore, the airline's chief executive announced on Saturday.


The Thai News Agency reported yesterday that Thassapol Balewelt said that the new route, which saw its inaugural flight on Saturday, would facilitate business and tourism, making it possible to fly from Phuket to Singapore without having to go via Bangkok.

With promotional fares of only 1,200 baht (S$48.60), Mr Balewelt said that the route would appeal to holidaymakers.

He also noted that the airline had achieved considerable success on its twice-daily Bangkok-Singapore route, with most flights at least 80 per cent full.

But AirAsia will be competing with Singapore-based low cost carrier Tiger Airways on this route. Tiger sells tickets for its daily flights to the Thai resort from just $30 each way.

And given that Singapore and Thailand have signed a mutual free skies agreement, industry observers reckon other players like Qantas associate Jetstar Asia and Thai Airways' associate Nok Air could also join the fray on this popular route. - Bernama

Nov 9, 2004
12% jump in traffic on budget carrier routes

TRAFFIC on routes served by budget airlines out of Singapore has jumped 12 per cent between June and August, compared to the same period in 2002 before Sars hit last year.

The growth also surpassed Changi Airport's overall traffic growth of 6 per cent during the same period.

The figure was cited in a four-page document outlining the changes in the aviation landscape that was distributed during Minister Mentor Lee Kuan Yew's dialogue with Singapore Airlines (SIA) unions and management yesterday.

In it, the Transport Ministry and the Civil Aviation Authority of Singapore revealed that the three budget airlines that now fly to Changi account for about 5 per cent of the airport's total flights.

And the figure looks set to rise when Singapore's latest budget carrier - Jetstar Asia, which is backed by Australia's Qantas - starts operating next month.

Valuair, the first low-cost carrier, started here in May while SIA-backed Tiger Airways took to the skies in September. Thai AirAsia, a subsidiary of Malaysia's AirAsia, also flies between Singapore and Bangkok.

To attract more budget airlines, Singapore is building a new low-cost terminal at Changi Airport. To be ready by the middle of 2006, the terminal will be able to handle up to 2.7 million passengers a year.

Despite the competition from low-cost carriers, SIA has managed to defend its turf and retain market share. However, profitability of the affected flights has been reduced, said the airline, which also released a seven-page document on various issues, including the key challenges it faces.

To compete with budget airlines, SIA recently offered promotional round-trip fares of $150 to Bangkok and Jakarta, and $300 to Hong Kong - a discount of up to $150 compared to its regular fares.

Apart from the threat from budget airlines, SIA will also have to deal with competition from other full-service carriers such as Emirates and Thai Airways.

The airline said in its paper: 'Much of SIA's growth and continued network appeal is dependent on the traffic rights it will obtain... SIA's network growth would also allow Changi to compete effectively with other major hub airports where network carriers such as Thai Airways, Cathay Pacific and Emirates Airlines are expanding.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

This story was printed from TODAYonline

Valuair gets smart on its new positioning strategy

Tuesday • November 9, 2004

POSITIONING, as those mavens of marketing Al Reis and Jack Trout famously said, is not what you do to a product. Positioning is what you do to the mind of the prospect.

Valuair, Singapore's first budget airline may be doing exactly that as it strives to differentiate itself from the other budget airlines in Singapore and the region.

The new strategy positions Valuair as new product category thus differentiating it from the "cheap flight-no frills" category of budget airlines, said Mr Phil Mulholland, senior vice-president of Grey Global Group, the airline's new brand manager.

With its new tagline "fly smart", the airline is targeting current frequent fliers on full service carriers as well as air travellers who are on the look out for good value.

It is a clever idea that sublimates the pricing aspect into the value aspect, said experts.

"They're playing on the word smart by telling travellers that they getting a good bargain," said Professor Tan Soo Jiuan who teaches marketing at the National University of Singapore. "The use of smart is also a play on the intelligence of the travellers."

"It is just like how Singapore Airlines managed to beat the European and American airlines by focusing on its Singapore Girl image. This way, they were able to 'upgrade' the consumers' minds so that they were less focused on price analysis," she added.

Experts like her feel that it is precisely because such a strategy may not be sustainable for a "budget" airline whose business model is predicated on "value for money" that it might be better to abandon the price penetration tack for a unique positioning that is not reliant on pricing.

"It can't engage in the price war for too long so this strategy of focusing on 'fly smart' will give them some leeway to veer away from the price sensitive segment. It's a way out of the price war," said Prof Tan.

Still, Valuair's budget-airline-with-full services strategy seems to be working.

Research by Grey revealed that the airline consistently exceeded people's expectations and passengers felt little difference between flying with Valuair and an unnamed full-service airline.

Privately owned Valuair started operations in May this year and currently flies daily to Bangkok, Jakarta and Hong Kong on A320s. From next month it will begin daily flights to Perth. — Shobha Tsering Bhalla

Copyright MediaCorp Press Ltd. All rights reserved.

I have a question:

does Tiger Airways fly from terminal 1 or 2?

I have a question:

does Tiger Airways fly from terminal 1 or 2?

Terminal 1. :)

thanks

I would have expected them to use T2 since SIA uses it and theyre partly owned! :bash:

thanks

I would have expected them to use T2 since SIA uses it and theyre partly owned! :bash:

I guess it doesn't matter since they are going to use the budget terminal in 2006.......:yes:

oh well, I will be getting to try Tiger Airways for my first time next month, and I heard its free seating! :D

oh well, I will be getting to try Tiger Airways for my first time next month, and I heard its free seating! :D

Take pictures!!!!!! :D

I wanna take!

but now with free seating I need to be extra kiasu. I wanna get a window seat on the right of the aircraft in case I can get a skyline view. :D

What else is there to take at T1 anyway?

Time is GMT + 8 hours
Posted: 10 November 2004 1448 hrs

Jetstar Asia takes delivery of first Airbus 320

Jetstar Asia took delivery of its first plane on Wednesday ahead of its launch in December as the third budget airline to operate from Singapore's Changi Airport.

http://www.channelnewsasia.com/imagegallery/store/phpUiTTob.jpg

Jetstar Asia's vice president for operations, Gregory Thompson, told reporters on board the aircraft, an Airbus 320, at Changi that the airline was determined to match the low fares of its rivals.

"The airfares will be competitive obviously and they will be sustainably competitive," Thompson said.

"We will be at the lower end of the low-cost carriers regardless of what it takes."

Thompson, however, stressed the airline's determination to drive down cost would not come at the expense of quality.

"Low cost doesn't mean low class," Thompson said.

Jetstar Asia is expecting two more A320s to arrive in the next few weeks before the airline starts flying in December.

The airline will announce details of its fare and route structure in the next two to three weeks, Thompson said.

Jetstar Asia has said before it will fly to destinations within five hours from Singapore.

The airline is 49.9 percent owned by Australian national carrier Qantas, with the other stakes held by the Singapore government's Temasek Holdings and two prominent local businessmen.

Budget carriers Valuair and Tiger Airways began operations in Singapore this year. Pioneering no-frills carrier AirAsia has also started flying between Bangkok and Singapore although it is not based in the city-state. - AFP

Copyright © 2004 MCN International Pte Ltd

Business Times - 10 Nov 2004

Tiger Airways Names Tony Davis Chief Executive

SINGAPORE - Budget airline Tiger Airways, has named Tony Davis to replace Patrick Gan as its chief executive.

Mr Davis, 38, was the founding managing director of bmibaby, a successful British low fares carrier and has 18 years experience in airlines, it said in a press release on Wednesday.

Mr Gan left Tiger Airways last month after eight months in the company.

Tiger Airways is 49 per cent owned by Singapore Airlines.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 10 November 2004 1819 hrs

Jetstar Asia seeks to be different by flying longer routes
By Melvin Yong, Channel NewsAsia

SINGAPORE : Singapore's newest budget carrier, Jetstar Asia, is seeking to differentiate itself from its competitors.

In an interview with Dow Jones Newswires, Jetstar says it plans to fly farther than its rivals to make up for its late entry into the Singapore market.

Chief operating officer Con Korfiatis was quoted as saying Jetstar will fly anywhere within a five-hour radius of Singapore.

It is looking at destinations as far away as Shanghai, Mumbai Perth and Darwin.

Such a route map will differentiate Jetstar Asia from its Singapore-based rivals, which are focusing on shorter routes like Bangkok and Phuket.

And if the airline can start flying to China within a year, it will be well positioned to take advantage of the expected traffic boom generated by the 2008 Beijing Olympics.

Singapore-based Jetstar is 49-percent owned by Australia's Qantas Airways.

It expects to start commercial flights in December, after taking delivery of its first aircraft on Wednesday -- an Airbus A320. - CNA

Copyright © 2004 MCN International Pte Ltd

Nov 11, 2004
Jetstar Asia to offer fixed seating

Jetstar Asia took delivery of its first aircraft yesterday, saying it will reveal where it will fly to and its fares in two to three weeks.

Its chief operating officer, Mr Con Korfiatis, told The Straits Times it is looking at Taipei, Hanoi and points in the Philippines, among other destinations within five hours by air from Singapore.

While Tiger Airways and Malaysia's AirAsia, and its sister airline Jetstar based in Australia, have free seating, Jetstar Asia plans to allocate seats, like Valuair does.

Mr Korfiatis explained: 'From the market studies we've done, we feel customers for our business here would value the added service, and since it won't increase our costs by too much, there is no impact on the fares.'

The carrier starts flying next month and will have three planes by Dec 25.

Singapore's first low-cost carrier, Valuair, flies to Bangkok, Jakarta and Hong Kong, and will strike out to Perth next month. Tiger has services to Bangkok, Phuket and Hat Yai.

Before it can fly anywhere, Jetstar Asia - a partnership between Australia's Qantas, Singapore investment company Temasek Holdings and two Singapore businessmen - has to apply to the Transport Ministry for air traffic rights.

This will be done when it gets its licence to operate out of Singapore from the Civil Aviation Authority of Singapore, it said.

Its vice-president (operations), Captain Gregory Thompson, said the carrier will be low-cost but not low-class.

Only the best have been picked as its cabin crew, who will don black uniforms with an orange trim, he stressed. And its 180-seater aircraft looks smart, with grey leather seats to match the aircraft's body, and touches of orange on the seats and overhead compartments.

Like Tiger, AirAsia and most budget airlines, Jetstar Asia will not be throwing in free meals. Passengers can buy food and drinks on board. -- KARAMJIT KAUR

Copyright © 2004 Singapore Press Holdings. All rights reserved.

This story was printed from TODAYonline

Jetstar Asia will avoid 'crazy PR' fares

Thursday • November 11, 2004

Fares that are competitive but not gimmicky are what travellers can expect from Singapore's third low-cost carrier, which is likely to start flying next month.

Jetstar Asia — which is 49.9-per-cent owned by Qantas Airways — promises to have a transparent fare structure, with tickets that will be cheaper than low-frills airline Valuair and some 40 per cent less than full-service carriers, said its head of marketing Dorit Grueber.

As Jetstar Asia took delivery of its first 180-seater Airbus A320 plane yesterday, Ms Grueber said that it would "avoid the crazy PR (public relations) fares" that low-cost carriers Tiger Airways and Malaysia's AirAsia had offered.

AirAsia had retaliated against Tiger's limited one-way $1 promotional fares with one-way 49-cent and 29-cent deals to Bangkok and Phuket, respectively.

"There's a difference between promotional fares and gimmick fares," noted Ms Grueber.

"Theirs (the competitors) are not promo fares, they are PR fares," she said.

As with Tiger and AirAsia, there will be a range of drinks and cold and hot food for sale.

However, unlike typical budget carriers, passengers on Jetstar Asia will have allocated seats and a 20-kg baggage allowance.

Jetstar Asia hopes to receive its air operator's certificate in two or three weeks, at which time it will also announce its destinations and fare structures.

The budget carrier will be looking at an "interesting mix of routes" within five hours flying time from Singapore, said vice-president of operations Gregory Thompson.

This puts Shanghai in China and most of India, as well as Australian cities Darwin and Perth, within reach.

Jetstar Asia will have three A320 aircraft by the end of next month .

The airline plans to expand its fleet to more than 20 aircraft within three years.

Besides Qantas, Jetstar Asia's other shareholders are Temasek Holdings and Singapore businessmen Tony Chew and Wong Fong Fui. — Tay Tsen-Waye

Copyright MediaCorp Press Ltd. All rights reserved.

A more detailed report in Tiger's new CEO......

Business Times - 11 Nov 2004

Another baby for Tony Davis to bring up

Tiger Airways names 18-year UK airline veteran as new CEO

By DONALD URQUHART

(SINGAPORE) Budget carrier Tiger Airways, which is backed by Singapore Airlines, has named its second chief executive in eight months - this time from within the airline industry, following the surprise departure of former pharmacist Patrick Gan last month.

Tiger announced yesterday the appointment of Tony Davis, founding MD of BMIbaby, the budget offshoot of British carrier British Midland Airways (BMI).

Mr Davis, with 18 years' experience in the airline industry, was brought in to replace Mr Gan, an 18-year veteran of the healthcare and pharmaceutical industry who quit last month.

Mr Davis brings wide-ranging airline experience to his new job, including postings with British Airways, Gulf Air, BMI and its budget offspring.

Most relevant to his new role is Mr Davis's part in helping to start up BMI's low-cost carrier BMIbaby, overseeing its expansion to a current fleet of 14 aircraft serving 26 destinations in the UK, Ireland and Continental Europe.

Pointing to Mr Davis's experience in the budget airline sector, along with his mainstream carrier experience in strategic planning, operations, marketing, and government and industry affairs, Tiger chairman William Franke said his addition would provide the airline with 'accomplished, battle tested and focused leadership as we expand our reach in the increasingly competitive South-east Asian travel market'.

Mr Davis will have his work cut out for him as competitive pressure mounts in the region following the explosive development of at least half a dozen budget carriers from Thailand, Malaysia, Singapore and Indonesia over the last year-and-a-half.

Tiger, which made a splash in mid-September with inaugural fares of only $1 to Hatyai, Bangkok and Phuket - only to suffer website gridlock from the rush of eager customers - faces stiff competition from earlier entrants, Malaysian-based AirAsia and its Thai offshoot, Thai budget carrier Nok Air, Singapore's ValuAir and Indonesia's Lion Air. And by end-December, Qantas-backed Singapore-based Jetstar Asia will take to the skies upping the competition yet another notch.

Although the business models are not directly applicable to the Asian environment, budget carriers like Southwest Airlines in the US and Ryanair in Europe have captured as much as 20 per cent of the air travel market there.

Tiger has earlier said it expects to be profitable within its first year and currently operates two Airbus A320 aircraft to three destinations in Thailand with plans to increase its fleet by another 10 planes by the end of 2006.

'I am very excited about the opportunity to lead Tiger and to embrace the challenges of growing a new-generation airline in South-east Asia,' said Mr Davis, who will relocate to Singapore by Jan 1.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

November 16, 2004

Tiger trademark

UK Tiger Airways files to stop S'pore budget airline using name in Europe Move to block

By Chua Kong Ho

THE EUROPEAN Union is considering a petition from UK-based Tiger Airways, which operates joyrides using World War II vintage biplanes, to throw out its Singapore namesake's bid to register its "Tiger Airways" name as a trademark in Europe.

Although poles apart in terms of both geography and business, the shared name is causing some distress to the British pair who run the air tour service.

They believe that the Singapore budget carrier will prevent its mainly British customers from finding its website, www.tigerairways.co.uk - through which it derives at least 50 per cent of its bookings.

The Singapore Tiger Airways website is www.tigerairways.com.

"This opposition, if successful, will prevent them from trading under the name Tiger Airways, including on the Internet, within the European Union," said Mr Chris Rollings, co-owner of the Gloucester-based Tiger Airways, in a phone interview.

"Our opposition is on two grounds: One, that we have a previous unregistered mark and two, that we have a previous well-known mark which is identical."

EU's Office For Harmonisation In The Internal Market (OHIM) received the opposition filing last Tuesday, a check of its databases showed.

The OHIM will issue a final and binding decision on the trademark application, a process that could take more than a year.

If successful, Mr Rollings' next step is to press Singapore's Tiger Airways to give up its www.tigerairways.com domain name.

Singapore's Tiger Airways filed its EU trademark application last Dec 18, the same day Streats reported the objections of the UK operator.

Mr Rollings, too, filed a trademark, but with the UK national body.

Trademark lawyers Streats consulted previously said that the UK Tiger Airways will have grounds for a claim if it can prove that there is confusion or damage caused by the Singapore business sharing the same name.

So far, business has not been affected, Mr Rollings said.

However, as Singapore's Tiger Airways continues to rack up many Web "hits", his fear is that it will rise in search engine rankings and muscle out the UK operator from the top of the list.

"That could cause our customers to search under some other parameters and be directed to our competitors' websites."

A search using Google returned Mr Rollings' company as the first result. Yahoo! ranked the Singapore carrier first, followed by the UK company. MSN ranked the UK company first and the Singapore carrier third.

However, while there has been no discernible impact on business so far, there has been plenty of confusion.

Traffic to the www.tigerairways.co.uk website has risen 10-fold since Singapore Tiger Airways started operations, and the UK site now gets more hits from Singapore residents than the US and UK combined, said Mr Rollings.

"That the possibility of confusion exists is beyond doubt in my opinion. The most recent proof being my being awakened at 4am today by a phone call from a lady who wanted to book a flight out of Singapore!

"By no means the first such call, but the most irritating timing so far."

He has also received job applications from people who want to work with the Singapore carrier and solicitations from aircraft leasing companies.

Mr Rollings was willing to change his company's name for a "substantial payment", he told Streats.

He said that the outgoing Tiger Airways chief Patrick Gan had previously made an offer that he deemed "insignificant".

Valuair recently took over the www.valuair.com domain from discount travel portal Priceline.com, which previously owned the domain.

Copyright © Singapore Press Holdings, 2004. All rights reserved.

November 16, 2004

Valuair to hold BBQ at Padang

By Chua Kong Ho

IT will be the first time a Singapore budget carrier is flying to Australia, and the people at Valuair want everyone to know this.

Besides a print advertising campaign to ramp up public awareness of its daily Singapore-Perth service, which launches on Dec 1, Valuair is also holding a barbecue for the public at the Padang from 3pm to 8pm on Saturday.

The bash, for 1,500 people, is organised with the Western Australia tourism authorities.

Celebrity chef Christopher Taylor, the executive chef at Perth's Fraser's Restaurant, will be in town for cooking demonstrations and to judge a barbecue contest, in which three teams will each win a pair of Valuair tickets to Perth.

You can also sample Aussie beer and watch an Aboriginal dance performance.

Valuair is offering tickets from as low as $350 for the round trip, excluding airport taxes and fuel surcharges. It also flies to Bangkok, Jakarta and Hong Kong.

Copyright © Singapore Press Holdings, 2004. All rights reserved.

This story was printed from TODAYonline

Jetstar aims to fly above the fray

Amid rising competition, budget carrier plans to be first in region to offer in-flight entertainment

Tuesday • November 16, 2004

Shobha Tsering Bhalla
shobha@newstoday.com.sg

JETSTAR Asia, which took delivery of its first aircraft on Wednesday, is looking at introducing in-flight entertainment features amid intensifying competition in the low-cost segment of the industry.

The latest entrant into Singapore's increasingly-crowded skies which had started off as a strictly "no frills" airline at its launch two months ago may now be adding electronic in-flight entertainment on a "pay-per-use" basis said its chief operating officer Con Korfiatis.

"The fact that people have to buy food on flight does not mean there will be no entertainment, at least on our longer routes. We're not sure what form this entertainment will take but electronic entertainment is a possibility," he told Today.

If this happens, Jetstar Asia will be the first budget airline in South-east Asia to offer in-flight entertainment — a tool that experts hail as the "big differentiator" in an industry where ticket prices are roughly similar across the board.

Interestingly, Virgin Blue — an archrival of Jetstar Asia's sister concern in Australia — has already thrown down the gauntlet by announcing it will introduce live television services from the middle of next year.

Virgin Blue plans to charge a fee of A$5 ($6.37) for the service which can be activated with a credit card and provides unlimited use on a one-way flight.

In-flight entertainment is the new buzzword among budget airlines anxious to get an edge over the competition.

Still, perks like in-flight entertainment are ephemeral attempts to create differentiation, say experts and they go against the fundamental trend in airline travel — the commoditisation of airplane seats.

But that has not stopped other budget airlines like JetBlue Airways and the low fare arms of United and Delta — among others — from offering in-flight entertainment.

In Europe, in-flight entertainment is taking a new twist with Ryannair planning to offer in-flight gambling.

The Dublin-based budget carrier — Europe's largest — has just started offering in-flight entertainment on a pay-per-use model.

The driving force behind this change of heart among budget carriers is increasing airline competition and consumer demand, say experts.

Earlier this year, even the United States' most successful budget airline — Southwest — was reportedly toying with the idea of introducing in-flight entertainment.

Some industry watchers fear that budget airlines like Southwest, which have significant cost advantages over their full-service counterparts, may be sacrificing their advantages by providing in-flight entertainment.

That goes for Jetstar Asia too. Just how competitive can Jetstar Asia keep its fares if it introduces in-flight entertainment?

Very competitive, said Mr Korfiatis.

Adding in-flight entertainment would not be "at the cost of our low pricing structure".

"What we'll never do is put frills on our aircraft that would have an (adverse) impact on our fares. Some other guys are looking to giving it free but that would affect their fare structure.

"We don't plan to do that. Our view is that at the end of the day, the consumer won't be prepared to pay a significant amount more for entertainment. So, it would be on a user-pay basis and structured," he said.

In fact, if Jetstar Asia goes for pay-per-use entertainment it might actually reap attractive revenues.

Ryannair, which is introducing in-flight entertainment on five of its planes this month on a pilot run, expects the service to lift revenues by at least euro 14 million ($30 million) in the first year.

The airline needs only 3 per cent of its passengers to use the portable entertainment units to cover its costs.

In-flight entertainment or no, Mr Korfiatis stressed that fares would be low and readily available.

"We will be providing very low everyday fares year-round instead of just a few very gimmicky low fares that have very limited availability and more of an irritation factor."

The need to provide entertainment on board may be crucial to Jetstar's business plan as its routes are believed to include destinations that are an hour longer than those covered by most Asian budget carriers which fly within a four-hour radius.

Mr Korfiatis said Jetstar Asia was looking at routes to Shanghai, China, Mumbai, India, Vietnam, Taiwan, Perth and Darwin in Australia, and anything in between.

The airline expects to start commercial flights in mid-December — two months after Singapore Airlines'-owned Tiger Airways took off, and six months after Singapore-based Valuair.

It has appointed Red Card as its advertising agency and will be launching a regional advertising and branding campaign soon.

The low-cost Asian carrier is a partnership between Temasek Holdings, Qantas Airways and two Singaporean investors, with Qantas holding a 49-per-cent share.

Copyright MediaCorp Press Ltd. All rights reserved.

i wonder what entertainment what be provided?

theyll throw u a pack of playing cards :lol:

so rude :(((

food fight is always good entertainment :)

imagine the stewardess tossing a bun at you and saying "Nah!"

i think i would giggle

Time is GMT + 8 hours
Posted: 19 November 2004 1233 hrs

Jetstar Asia awarded Singapore Air Operator's Certificate
By S Ramesh, Channel NewsAsia

SINGAPORE : The Civil Aviation Authority of Singapore (CAAS) has awarded Jetstar Asia with its Air Operator's Certificate, clearing the way for the new low-cost carrier to commence commercial flights from Changi Airport.

A statement from Jetstar says the certificate allows it to begin the process of formally applying for traffic rights for the destinations it hopes to begin flying to, starting next month.

The approved routes and fare structure will be announced within the next few weeks.

Jetstar Asia's first aircraft arrived in Singapore last week.

The low-cost carrier plans to begin serving multiple destinations throughout Asia before the peak holiday period next month. - CNA

Copyright © 2004 MCN International Pte Ltd

sq better get its aus-us flights...

Business Times - 19 Nov 2004

Join Valuair for an Aussie BBQ

By VEN SREENIVASAN

(SINGAPORE) If you're into BBQs, beer and wine - though not necessarily in that order - then head on down to the Padang tomorrow.

Discount carrier Valuair has tied up with Tourism Western Australia, the Western Australian Department of Industry and Resources and Austrade to organise a massive Western Australian jamboree to promote its flights to Perth from next month.

Visitors to the day-long Padang party get to tuck into an Aussie BBQ complete with steak, sausages, seafood and Australian beer and wine, while watching the Wadumbah Aboriginal Dance Group perform. They can buy coupons at the Padang for $15, which will entitle two people to a BBQ platter and a glass of wine, beer or juice.

Australian High Commissioner Gary Quinlan will be guest-of-honour at the event.

A highlight is a BBQ competition judged by Perth-based celebrity master chef Chris Taylor. Winning teams walk away with Valuair tickets to Perth and custom-made plates autographed by chef Taylor, who will also demonstrate the finer points of cooking up a top-notch Aussie BBQ. Valuair chief executive Sim Kay Wee hopes the event will entice Singaporeans to take advantage of the airline's 'value-for-money fares to fly to Perth'.

To further promote Perth as Valuair's latest destination, the airline has tied up with NTUC FairPrice supermarkets to promote Western Australian food and wines from now until Dec 1 at all its 80 stores island-wide.

Perth is Valuair's fourth destination, after daily flights to Bangkok, Hong Kong and Jakarta. It will charge $350 for return tickets - about $100 below the regular fares charged by Singapore Airlines.

However, SIA has just slashed return fares on its 1am flights to Perth to $328, provided passengers travel in pairs. Qantas has also slashed its Singapore-Perth fares to $348 for those travelling in pairs.

Singaporeans account for almost 14 per cent of Western Australia's international arrivals. And most Singaporean visitors to Australia are repeat visitors.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 23 November 2004 1910 hrs

Budget hotels look to low-cost carriers for more business
By Thomas Cho, Channel NewsAsia

SINGAPORE : With the recent spurt of low-cost carriers in the region, budget hotels in Singapore are hoping to see an upturn in their fortunes.

In the past few years, some budget hotels have gone under after failing to meet their mortgage payments.

But property analysts say the number has been dropping.

Only 3 budget hotels were transacted through mortgage sales this year with another 2 up for auction next month.

This is down from 11 in 2002.

Hangout@Mount Emily is a newcomer to the budget hotel scene.

But it's already tied up with budget carriers to bring in the business.

Suhaimi Rafdi, Vice President, Leisure and Entertainment, Cathay Organisation, said: "With more budget airlines travelling into the country like Singapore, we would expect a surge in increase in travel by budget travellers because they are likely to be our target market where the company is looking at to directing the target spenders as well."

The hotel has enjoyed an occupancy rate of almost 70% since it opened in April.

Shaun Poh, Director, DTZ Debenham Tie Leung(SEA), Pte Ltd, said: "With a lot of budget airlines coming up, so you should pair them up with budget travellers and budget hotels. So, in that case, you see a demand for such budget hotels coming into the industry right now."

However, not all budget hotels in Singapore are seeing a sharp increase in occupancy numbers especially those in Geylang where there are plenty of budget hotels.

Hotel 81 alone has 9 outlets there and the Fragrance Group 5.

As a result of intense competition in that area, some stand-alone hotels there are looking for buyers.

But auctioneers say - they are seeing demand for these properties.

Mr Poh said: "During the peak, per room could go for 130 to 150k per room. But in these days, if you have a budget about 70 to 75k per room, you could get a decent budget hotels in Geylang. So, with that, you see the value of budget hotels have gone down about half compared to last time. That makes budget hotels very attractive in Geylang areas."

There are about 110 budget hotels in Singapore - and they supply just about 15 percent of the total hotel rooms here.

And analysts say there's still room for them to grow. - CNA

Copyright © 2004 MCN International Pte Ltd

This story was printed from TODAYonline

Tiger Airways chief sues SPH for libel Suit charges that a BT report suggested he was 'incompetent'

Wednesday • November 24, 2004

THE outgoing head of Tiger Airways is suing Singapore Press Holdings for libel over a report suggesting he was fired for incompetence, court documents showed yesterday.

Lawyers acting for Tiger chief executive Patrick Gan filed a lawsuit against the company, citing an article that appeared in The Business Times last month.

The writ — a copy of which was faxed on Tuesday to The Associated Press by Mr Gan's lawyers — also names BT writer Ven Sreenivasan as a defendant.

According to the lawsuit, the article reported on allegedly strained relations between Mr Gan and the board at Tiger Airways — a no-frills subsidiary of flag-carrier Singapore Airlines that launched operations in September.

The story cited anonymous "company insiders" to back its claims and reported that Mr Gan was poised to leave the airline after being sacked by the board. The article implied that Mr Gan was an "incompetent" chief executive, the lawsuit said.

Mr Gan has "been gravely injured in his character and reputation, has suffered considerable distress and embarrassment, and has suffered damages" because of the story, the writ said.

Mr Gan's lawyers wrote to the BT's editor asking for an apology and damages, but did not receive a reply.

Tiger announced Mr Gan's resignation on Oct 22, saying he had told the board in July that he intended to leave his post.

"Patrick has done a good job in the process leading to the launch of operations last month," Tiger Airways chairman Bill Franke said in a statement at the time. The board accepted Mr Gan's decision to leave "with regret", it added.

A spokesman for Tiger Airways said yesterday that Mr Gan was serving out his notice at the company and would remain as chief executive until his replacement took the reins.

"We do not comment on pending legal suits," a spokesman for SPH said. — AP

Copyright MediaCorp Press Ltd. All rights reserved.

http://images.businessweek.com/common_images/bw_logo1.gif

JUNE 21, 2004

ASIAN BUSINESS

Will Asia's Low-Cost Airlines Fly High?
Demand may offset the hurdles faced by the region's new budget carriers

Zuwailiah Jamaludin had been wanting to take her mother and three children on a vacation in Thailand for years, but she just couldn't afford to get there. In early June, though, she and the family spent a week sightseeing in Bangkok and the northern city of Chiang Mai. Why now? Air Asia, the pioneer of no-frills flights in the region, was offering the 2,400-kilometer flight from Jamaludin's hometown of Johor Bahru, Malaysia, for just $45 each way. "We're on a budget," she says. "When Air Asia came along, we didn't want to miss the chance."

Much of Southeast Asia soon will have the same chance. Since Kuala Lumpur-based Air Asia took to the skies in November, 2002, a half-dozen low-cost carriers have opened for business or plan to do so by yearend. One-Two-Go and Thai AirAsia, an affiliate of the Malaysian carrier, have launched in Thailand, Valuair is flying out of Singapore, and Lion Air offers daily service from Jakarta to Singapore, Kuala Lumpur, and far-flung destinations in Indonesia. In response, big carriers, including Singapore Airlines, Thai Airways International, and Australia's Qantas Airways, are setting up low-cost subsidiaries. The boom is being driven by the governments of Malaysia, Thailand, Indonesia, and Singapore, which are granting landing rights to the carriers in hopes of boosting tourism and business travel. The new carriers "will make the market more dynamic," says Air Asia founder Tony Fernandes.

`FINGERS CROSSED'
But the rise of Southeast Asia budget carriers may not rattle established airlines quite as much as upstarts such as Southwest Airlines Co. (LUV ) and Ryanair (RYAAY ) have in the U.S. and Europe. A dearth of secondary airports within commuting distance of Asia's capital cities means that low-cost airlines there can't avoid congested and pricey metropolitan airports as easily as U.S. and European budget carriers can. That limits their ability to save on landing fees and to get into and out of airports quickly -- the two pillars of the low-cost model. "The best we can do is 45 minutes turnaround -- and keep our fingers crossed that there's no bad weather," says Valuair Ltd. Executive Director Jimmy Lau.

The new Asian upstarts also face more competition than discounters elsewhere. In Europe or the U.S., no-frills carriers target routes that are dominated by just one or two carriers. But in Asia there's rarely any shortage of competition. In flying between Singapore and Bangkok, Valuair and Thai AirAsia compete with a dozen other carriers. On the Hong Kong-Singapore route, Valuair squares off against seven others. "In the U.S. and Europe, budget carriers have had huge impact on traffic and share," says Richard Stirland, director general of the Kuala Lumpur-based Association of Asia Pacific Airlines. "But I don't see it happening in this part of the world."

Asia's traditional airlines are more cost-competitive than their European and American counterparts, too. The likes of Cathay Pacific, Singapore Airlines, and Thai Airways enjoy lower average costs per kilometer than other global carriers. They're often even as low as no-frills airlines, which typically keep a lid on costs by flying only short-range, narrow-body planes. Cathay Pacific Airways Ltd., for instance, keeps its wide-body Airbus A330s busy by making several daily flights between Hong Kong and Taipei -- and then using the same plane for a 13-hour overnight trek to London. And because full-service carriers have first and business classes -- plus cargo -- they can sell economy seats at a discount. "They have an embedded low-cost carrier at the back of the plane," says Timothy Ross, a UBS analyst in New Zealand. So when Valuair offered a $176 round-trip fare between Hong Kong and Singapore, both Cathay and Singapore Airlines went even lower.

In fact, rather than cannibalizing full-service airlines, the arrival of no-frills rivals could create more business for everyone. As prices fall, full-service carriers say their planes are filling up. Thai Airways International, for example, raised load factors by offering 30 of the 150 seats on daily flights between Chiang Mai and Bangkok for just $25 round-trip, down from its regular fare of $112. "As long as we make a profit, that's good enough," says Chaiwat Chanapai, vice-president of Thai Airways. And as long as fares stay low, it'll be good enough for budget-conscious passengers such as Jamaludin to take more of those cherished trips abroad.

By Frederik Balfour in Bangkok

Copyright 2000-2004, by The McGraw-Hill Companies Inc. All rights reserved.

Business Times - 25 Nov 2004

Jetstar Asia announces 7 routes

SINGAPORE - Jetstar Asia, Qantas Airways' no-frills carrier, announced on Thursday seven new destinations it will serve out of Singapore, including Shanghai, in a move sure to raise the stakes in Asia's cutthroat budget aviation market.

The company - which is to take to the skies next month - will also touch down in Hong Kong, Taipei, Jakarta and Manila, plus the East Java port of Surabaya and the Thai beach town of Pattaya.

Three of those seven routes will open from December, with the rest to be added in stages from next year, the company said in a statement without saying which would be the first or the exact dates the services would start.

"This is just the beginning," said Jetstar Asia Chief Operating Officer Con Korfiatis. "But it's also indicative of the types of destinations we'll be flying to; some expected, some not expected."

Jetstar Asia's planned route network is ambitious compared with those of its Singapore-based rivals Valuair and Tiger Airways, both of which started operations earlier this year. It also underscores the growing competition in Southeast Asia for discount air travellers.

Low-cost air travel has boomed over the past three years since Malaysia's AirAsia demonstrated that the business model worked just as well in Asia as it had in the United States and Europe.

But Asia's expanding crop of new cheap carriers is already starting to do things differently from predecessors elsewhere, notably by trying to expand the pool of potential customers by servicing longer routes.

Conventional aviation industry wisdom in developed markets held that the no-frills carriers were appropriate only for routes of up to three hours' flying time. But many of the new services in Asia target cities that are four or even five hours away.

Jetstar Asia is 49 per cent held by Qantas, Australia's national carrier. Its other significant backers include Temasek Holdings which holds 19 per cent.

Mr Korfiatis said Jetstar Asia would be the first international carrier to serve Pattaya, a Thai resort about two hours' drive south of Bangkok.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

good! at least no boring destinations like perth!

Time is GMT + 8 hours
Posted: 29 November 2004 1247 hrs

Valuair partners Wotif.com to provide online hotel deals

SINGAPORE : Valuair Ltd, Singapore's first value-for-money airline has partnered with last-minute global accommodation specialist, Wotif.com, to provide last minute hotel deals to its online users.

With this partnership, Valuair customers will have direct access to Wotif.com's great last-minute accommodation deals and enjoy savings of up to 70 percent for accommodation bookings in the next 14 days across a wide range of over 6000 hotels, motels, services apartments in over 32 countries.

Through this collaborative effort, Valuair aims to complete the whole travel experience by giving its customers not only value-for-money airfares but also attractive accommodation deals, which according to Sim Kay Wee, CEO of Valuair, is pivotal for customers who are becoming more informed and selective when making their travel choices online.

Said Mr. Sim, "Both Wotif and Valuair are increasing market share and brand awareness in the region and we both offer a value-for-money service. It's only logical that two like-minded businesses should join forces in providing what we feel is the best value in the industry."

This partnership is also very timely for Wotif.com as it sets its sights firmly on growing its market presence in Asia.

"We applaud the inroads that Valuair has made and are delighted to be working closely with a company that shares Wotif.com's pioneering spirit and commitment towards delivering greater value to customers," said Charles Tee, Chief Operating Officer, Wotif.com - Asia.

"The bringing together of great value fares with last-minute discounted accommodation deals has made the whole travel experience even more affordable and attractive. We are confident that this will not only make travel accessible to a larger audience, but also in turn give rise to more frequent and spontaneous travel. We are obviously very proud to be part of this strategic alliance that will be a major driver for growth of the travel market in the region," added Mr. Tee.

With no pre-registration and only 5 clicks to book, the simplicity of Wotif.com's easy-to-use website and booking engine with fast loading pages has been specially designed for the convenience of the user.

Prices are based on the hotel's inventory of real-time room availability in the next 14 days for instant booking and confirmation.

All rates are inclusive of taxes, with no hidden or unexpected extras to pay for. - CNA

Copyright © 2004 MCN International Pte Ltd

Dec 2, 2004

LION AIR CRASH
Budget carriers give safety assurance

Operators insist that cheaper fares do not mean lower safety standards

By Karamjit Kaur
Transport Correspondent

AFTER two runway accidents involving budget airlines in recent weeks, low-cost carriers have moved quickly to dispel any notion that cut-price fares equal compromised safety.

Following Tuesday's Lion Air crash in Java that killed 26 people and an incident on Nov 7 when an AirAsia plane skidded off a runway in Kota Kinabalu, the safety of budget carriers has inevitably come under scrutiny.

Valuair and Tiger Airways - Singapore's two budget airlines - have both maintained that safety is a top priority.

Valuair's chief executive officer Sim Kay Wee said: 'Without a safety culture, one should not even think about operating an airline.'

Tiger's chief executive officer Patrick Gan cited an incident in October when one of the airline's two planes was grounded in Bangkok due to an electrical fault.

He said: 'We could have solved the problem temporarily by moving some of the parts around, but I did not want the aircraft to take off until the affected part was replaced with a spare part, which had to be flown in.

'Under no circumstances do we compromise on safety.'

Mr Con Korfiatis, the chief operating officer of Jetstar Asia, a budget airline scheduled to begin operating out of Singapore this month, said: 'The true savings come from flying more hours in a day, thereby using the aircraft more effectively.

'Maintenance and crew-training procedures are never compromised.'

Quicker turnarounds between flights do not necessarily mean that maintenance crews are spending less time checking aircraft, according to aviation experts.

Mr Peter Harbison, the managing director of the Sydney-based Centre for Asia Pacific Aviation, said extensive aircraft checks are not carried out between flights anyway.

Airline safety is also not necessarily affected by the age of the fleet.

The Lion Air plane involved in Tuesday's crash was 24 years old.

Valuair, Tiger Airways and Jetstar Asia all operate brand new planes, while the average age of an AirAsia aircraft is 16 years.

But AirAsia chief Tony Fernandes pointed out that an aircraft's safety or efficiency is not measured by its age but by how well it is maintained.

He said that AirAsia is regulated by the Department of Civil Aviation of Mal- aysia, which adheres to international standards.

An airline's wealth may be a factor, but even major airlines have recently been trimming their expenses.

Mr Anthony Concil, spokesman for the International Air Transport Association, which represents more than 280 full-service airlines, said: 'The last three to four years, airlines have been cutting costs to stay lean and efficient.

'But this has not been at the expense of safety.'

Last year, a record low of 27 fatal accidents, involving 702 deaths, occurred worldwide, compared with the 1,022 people who were killed in 40 fatal airline accidents in 2002.

Records also show that since 1970, many of the major United States-based carriers, including Delta Airlines, Northwest Airlines and United Airlines, have had fatal accidents, while low-cost carriers such as JetBlue and Southwest Airlines have maintained clean records.

The Civil Aviation Authority of Singapore (CAAS) requires all airlines to meet various standards before they are given an operating licence.

A CAAS spokesman said regular safety inspections and audits are carried out even after licences are issued.

The two mishaps

-On Nov 7, an AirAsia Boeing B737-300 aircraft carrying 110 passengers skidded off the runway at Kota Kinabalu's international airport on landing and ended up with its nose wheel embedded in the soft soil. A five-year-old girl sprained her wrist and two other passengers suffered minor injuries.

-On Tuesday, a 24-year-old Lion Air MD-82 plane with 153 passengers and crew on board skidded off the runway at the Adi Sumarmo airport in Solo, central Indonesia, while landing in heavy rain. The aircraft broke into two on the tarmac, killing 26 people. One Singaporean woman who fractured her ribs, legs and an arm is in stable condition.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Dec 3, 2004

Three Valuair flights cancelled
More than 250 passengers affected as its new Airbus fails to arrive on schedule

By Karamjit Kaur
Transport Correspondent

VALUAIR had to cancel three flights to Bangkok and Jakarta in the last two days because its new plane, which was supposed to be here a few days ago, is still in Toulouse, France.

More than 250 of its passengers were transferred to flights by other airlines, among them Garuda Indonesia and Tiger Airways, the low-cost carrier told The Straits Times.

Valuair's third Airbus 320 was scheduled to arrive here before the airline started its Perth service on Wednesday, the same day it added a second daily flight to Hong Kong.

But because of an administrative hiccup on the part of aircraft manufacturer Airbus, the plane will be delivered only next week, said Valuair's chief executive officer, Mr Sim Kay Wee.

Meanwhile, he said, the carrier chartered an aircraft yesterday to do its scheduled flights to Bangkok and Jakarta, so 'our passengers' travel plans remain unchanged'.

The Straits Times understands the airline paid top dollar for the plane because it was a last minute arrangement and there is a shortage of that model of aircraft, also used by other budget carriers like Tiger Airways and Jetstar Asia.

It generally costs about $489,000 a month to lease, but the bill is much higher if the plane is needed for a short period.

It is not clear whether Valuair or Airbus will be picking up the tab.

DBS Vickers aviation analyst Chris Sanda does not expect the hiccup, which comes about seven months after Valuair started flying, to affect the airline's long-term reputation although affected passengers would be unhappy.

One such person is Mrs Priya Murthy, 31, who is off to Bangkok with her husband today. p> According to the teacher, Valuair called her on Wednesday night to tell her her noon flight today was cancelled.

She said: 'The woman didn't say why the flight was cancelled. Just that we'd been moved to the 4.50pm flight. I was unhappy because it means we'll arrive in Bangkok late. In the end, she moved us to the morning flight.'

They had paid $240 each for their flight.

She said: 'We picked Valuair because we thought it would offer a better level of service than the other budget carriers. Had I known this was going to happen, I would've paid more to fly Singapore Airlines.'

When told of Valuair's delivery delay, she pointed out that the carrier could have handled affected customers better.

Mr Sim told The Straits Times: 'We'd like to apologise to all passengers who may have been inconvenienced.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

06 December 2004

Jetstar Asia starts flights with launch of Hong Kong route next week

SINGAPORE : Jetstar Asia will take to the skies for the first time when it flies to Hong Kong one week from now at a promotional fare of 48 Singapore dollars (29 US) for a one-way ticket, the Singapore-based budget carrier said.

On December 16, the Qantas-backed carrier will launch its Taipei route at a promotional fare of 88 dollars for a one-way trip and services to the Thai resort of Pattaya will begin four days later with a special fare of 28 dollars one-way, it said.

Chief operating officer Con Korfiatis said the airline will announce details of four other routes -- Shanghai, Jakarta, Surabaya and Manila -- at a later date.

"We are very excited about these destinations ... they represent destinations that customers have a huge interest in," Korfiatis said at a media briefing to announce the airline's launch date.

"They represent markets in which at the moment there is no low-cost carrier competition and we will be the first low-cost carrier into many of these markets," he said.

The promotional fares are available on all seats during the first week of operations on all three routes, Jetstar Asia said.

Thereafter, the one-way fare to Hong Kong will start from 88 dollars, with Taipei from 118 dollars and Pattaya from 59 dollars.

Tickets sales will start Tuesday and can be purchased on the airline's website at www.jetstarasia.com or dialling directly to the Singapore call centre, Jetstar Asia said.

Jetstar Asia, the third budget carrier to begin operations in Singapore this year, is 49 percent owned by Qantas and 19 percent owned by Singapore government investment firm Temasek Holdings. The remainder is held by two local prominent businessmen.

The two other Singapore-based budget airlines, Valuair and Tiger Airways, fly to a range of Asia-Pacific cities including Bangkok, Hong Kong, Perth and Jakarta, but not to mainland China, Taiwan or the Philippines.

Pioneering no-frills carrier AirAsia of Malaysia has also started flying between Bangkok and Singapore but it is not based in the city-state. - AFP

Copyright © 2004 Agence France Presse. All rights reserved.

Business Times - 06 Dec 2004

Jetstar Asia seeks destinations in India, China

SINGAPORE - Budget airline Jetstar Asia on Monday announced cut-rate fares to its initial destinations of Hong Kong, Thailand and Taiwan and said it was seeking rights to fly to India and additional routes to China.

Singapore-based Jetstar Asia Pte Ltd, which is backed by Australia's Qantas Airways Ltd, said a ticket to Hong Kong would start at a promotional S$48 each way with service beginning Dec 13.

A one-way fare to the Thai beach resort of Pattaya would start at S$29 beginning a week later, while service from Singapore to Taipei would start on Dec 16, with the price of a one-way ticket starting at S$88.

Jetstar's chief operating officer, Con Korfiatis, also said the airline would begin flying to Shanghai from January, but company officials were also eyeing other Chinese destinations south of the commercial centre.

He said the carrier was hoping that Singapore's 'very proactive' pursuit of trade deals with China and India would open up the possibility of new routes for Jetstar to those countries.

Mr Korfiatis said the impending free trade deal between the republic and New Delhi would likely result in new destinations such as Chennai and Bombay 'sooner rather than later' for the budget carrier.

Jetstar Asia is the third low-cost airline to be launched this year out of Singapore after Valuair and Tiger Airways - backed by Singapore Airlines Ltd.

'We have said from the beginning that our success will depend on our ability to grow the market and by becoming the first low-cost carrier to serve several major population centres,' Mr Korfiatis said.

The low-cost carrier's four other confirmed destinations - Shanghai, the Philippines capital of Manila, Surabaya and Jakarta in Indonesia - would be offered from January.

Mr Korfiatis said earlier that Jetstar Asia would differentiate itself from its rivals, including the region's low-budget pioneer, Malaysia's Air Asia Bhd, by flying longer-haul routes.

Singapore's aviation authorities have embraced the growth of low-cost fliers and are building a passenger terminal at Changi Airport specifically for discount airlines. It is set to open in 2006. Jetstar Asia is 49 per cent held by Qantas, Australia's national carrier. Its other significant backers include Temasek Holdings Ltd, the Singapore government's main investment arm, which holds 19 per cent.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Dec 7, 2004

Jetstar Asia vies for HK market
Airline offers return fare from $176; experts don't expect more price-cutting as demand is high

BUDGET carrier Jetstar Asia is set to compete for the Hong Kong market with return airfares from $176.

But, analysts do not expect it to cause yet another round of fare-slashing, as one seen earlier this year.

In May, airlines cut fares when Valuair launched its flights to Hong Kong, but analysts said passenger numbers have been strong in recent months and there is enough demand for all the airlines in the market.

Currently, there are 202 passenger flights between Singapore and Hong Kong every week, and six carriers, including Singapore Airlines (SIA), Cathay Pacific Airways and Valuair ply the route.

The city is a popular destination for Singaporeans. According to the Hong Kong Tourism Board, there were 1.2 million visitors from South-east Asia in the first nine months of this year, of which 303,514, or about a quarter, came from Singapore.

Jetstar Asia, a new venture by Qantas, Temasek Holdings and two Singapore businessmen, starts ticket sales for its daily flights to Hong Kong, Taipei and Pattaya today.

Its once-daily flights to Hong Kong begin next Monday, and to mark the launch, all return tickets will cost $96 during the first week of operations. Thereafter, return tickets start at $176.

The company would not say how many tickets would be available at that price, nor what the upper price range was likely to be.

Valuair's return tickets to Hong Kong start at $238, while Cathay Pacific and SIA are have promotional tickets at $288 and $248 respectively.

Valuair spokesman Nilesh Pritam and an SIA spokesman both said their airlines would not cut fares in response to the new entrant.

Aviation analyst Vincent Ng of Standard & Poor's Asian Equity Research said: 'There will always be promotions, but drastic fare cuts are unlikely to happen as demand for air travel is now very high.'

Mr Seah Hiang Hong, head of research at Kim Eng Securities, feels that Jetstar Asia, with just one flight a day to Hong Kong with 180 seats, is unlikely to constitute a threat to the existing airlines.

At a media briefing yesterday, Jetstar Asia chief operating office Con Korfiatis said: 'We're entering Hong Kong because we see it as a strong market that can grow even further.'

Jetstar Asia also starts once-daily flights to Taipei from Dec 16 and Pattaya from Dec 20, at promotional return fares of $176 and $56 respectively for the first week, before rising to $236 and $118.

The carrier also has traffic rights to fly to Shanghai, Jakarta, Surabaya and Manila, and will announce details to these routes at a later date, Mr Korfiatis said, adding that the aim is to launch them next month.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

This story was printed from TODAYonline

Bookings open today for latest budget airline Jetstar Asia

Tuesday • December 7, 2004

Ted Chen
tedchen@newstoday.com.sg

THERE won't be anything stopping travellers from logging onto Jetstar Asia's site when bookings open today.

At least that is what the low-cost carrier is hoping.

Interested budget travellers can purchase their tickets from 8:00am today by logging in to Jetstar Asia's online Navitaire booking engine at its website or phoning its call centre.

Apart from the flight launches, Jetstar Asia's chief operating officer Con Korfiatis told Today that his airline's marketing strategy over the next few weeks to several months will consist of an advertising blitz in newspapers, outdoor advertising on buses and other tactical forms of advertising using various mediums to raise brand awareness.

Although he declined to provide further details on these "other tactical forms of advertising" and the total budget for the marketing campaign, Mr Korfiatis revealed that Jetstar Asia was not just competing on price alone.

"The other carriers seem to be quite focused on just the price promotion element but we're putting more emphasis on who we are as a brand personality as well," he said.

What this translates into, according to Ms Dorit Grueber, Jetstar Asia's head of marketing, is to build a brand where various aspects of Jetstar Asia's operations such as its tagline "What's Stopping You?", its call centre, website, check-in process, onboard experience and promotional activities all help to form a "total branding experience".

The choice of the Esplanade as the venue for its latest press conference has led to some speculation that Jetstar Asia is positioning itself as a classier and possibly more upmarket low-cost carrier than competitors, such as Valuair, which has made a name for itself with gimmicky and innovative marketing techniques.

Just late last month, Valuair celebrated the launch of its flights to Perth with a well-publicised barbecue on the Padang.

The event attracted 1,800 visitors and was supported by Tourism Western Australia.

That may be an impressive branding exercise but who knows what branding stunts Jetstar Asia may pull up from Down Under?

A relatively newcomer to the local low-cost carrier scene, Jetstar Asia is a partnership between Australian airline Qantas, Temasek Holdings and businessmen Tony Chew and F F Wong.

Copyright MediaCorp Press Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 08 December 2004 1834 hrs

Valuair hopes Singapore could sign more open skies deals
By Thomas Cho, Channel NewsAsia

SINGAPORE: Amid a growing number of budget airlines here, the battle is not just over passenger numbers but destinations and the rights to fly there.

Competition in the sector - which is already intense - is expected to heat up after Jetstar Asia starts flying next week.

And Valuair, for one, is hoping that Singapore could sign more open skies agreements with other countries so that it can expand its services.

When Valuair started flying to Perth this month, it became the first low-cost carrier from Singapore to move into the Australian market.

Valuair CEO Sim Kay Wee said: "We are blessed by the fact that we are very liberal with our traffic rights. As Singapore has concluded open skies agreement with many countries, we are not starved of traffic rights.....In that sense, we are luckier we got traffic rights to use and we hope that Singapore could sign more liberal air rights with other countries and we could fly to these countries freely without having to do what AirAsia does."

AirAsia has subsidiaries and hubs in different countries to facilitate its expansion into different markets.

Low-cost carriers are increasingly looking at flying to destinations further away so that they can grow their businesses.

And Valuair is hoping that Singapore can conclude more open skies agreement as it plans to expand into China, India, the east coast of Australia and the Middle East.

Mr Sim said: "We are looking at flying farther afield. We think the markets of India and China need more flights. So we need aircraft for that areas. We are looking at flying in the region of 5 to 8 hours. That would require aircraft that can do that type of flight lengths so that the entire region would be our market place."

To meet those targets, Valuair is looking into adding more and bigger planes into its fleet. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 09 Dec 2004

AWAir to be re-launched as low-cost carrier

By VEN SREENIVASAN

(SINGAPORE) AirAsia's Indonesian associate PT AWAir International has taken to the skies again after being ground for over two years. It has started test-flying on domestic routes using its 148-seater Boeing 737-300 aircraft.

Malaysia's AirAsia bought a 49 per cent stake in the Indonesian carrier earlier this year for a token US$2. The debt ridden airline suspended operations in March 2002.

In a statement yesterday, the airline said following yesterday's official ceremony it would be re-launched as a low-fare airline modelled after AirAsia. 'AWAir will adhere to a low-cost business model. AWAir will operate point-to-point flights within a three-hour radius. The airline will also operate on a no-frills, ticketless concept, where guests are issued with flight itineraries incorporating a unique booking number upon successful booking.'

The carrier said it will offer much lower fares than those charged by full-service carriers, but 'without compromising on safety'. The carrier's new management is headed by president-director Sendjaja Widjaja, while original shareholder Pin Harris is the president commissioner of the company.

BT understands from AirAsia that AWAir is also planning to start flights between Jakarta and Singapore during the first quarter of next year.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

December 10, 2004

Budget airline boom to push leasing rates up

HONG KONG - Singapore Aircraft Leasing Enterprise, one of the world's largest plane lessors by fleet size, said rates for new aircraft may rise 20 per cent next year because of rising demand from low-cost airlines in South-east Asia.

Leasing rates for new single-aisle planes such as the Airbus SAS A-320 and Boeing Co's next-generation 737 models have increased about 15 per cent this year, said Mr Robert Martin, chief executive officer of Singapore Aircraft Leasing.

AirAsia, Valuair and other discount carriers in Asia are expanding their fleets and adding new routes as competition intensifies. And Jetstar Asia, the international budget unit of Qantas Airways, will start its first commercial flight on Dec 13.

"All except one of our aircraft placements this year have gone to low-cost carriers, a sign of where the demand is," Mr Martin said in an interview. Singapore Aircraft Leasing, part-owned by Singapore Airlines, owns 60 planes.

Jetstar Asia has leased three A-320 planes from Singapore Aircraft Leasing and plans to operate 20 aircraft within three years. AirAsia, South-east Asia's largest discount carrier, will decide as early as this month whether to choose Airbus or Boeing for an order for as many as 80 aircraft, the company said last month.

Singapore Aircraft Leasing says there will only be about 10 new Airbus A-320 and Boeing 737 planes available for lease next year.

The company is considering new aircraft purchases, Mr Martin said. It has 14 A-320 planes on order and all of them will be delivered by May 2006. A new A-320 plane carries a catalogue price of US$63 million (S$104 million).

Singapore Aircraft Leasing wants to lease planes to Chinese airlines, Mr Martin said. China's passenger traffic will grow 7.3 per cent annually by 2023, compared with a global average of 5.2 per cent, Boeing said earlier this year.

"We will see the emergence of the first low-cost carrier in China in the next six months," Mr Martin said. "We're actively working to place aircraft there." - Bloomberg

Copyright © Singapore Press Holdings, 2004. All rights reserved.

Dec 12, 2004
Tiger Airways buys 8 new planes

By Karamjit Kaur
Transport Correspondent

BUDGET carrier Tiger Airways is buying eight new aircraft to keep its expansion plans on track as the airline industry continues to cope with a shortage of planes and pilots.

Sources say the airline, which is co-owned by Singapore Airlines, has signed a letter of intent with European manufacturer Airbus for the single-aisle A320 planes to be delivered next year and in 2006, to meet a projected increase in business.

Tiger Airways, which started flying in September this year, now has two aircraft and goes to Bangkok, Hat Yai and Phuket. Its target is to serve up to 10 destinations by the end of its first year of operation, and 15 by the second year.

The Straits Times understands that the new planes would probably be taken on sale-and-lease-back deals arranged before delivery.

To free capital, it is common for budget airlines buying directly from the manufacturer to re-sell the planes to a bank or a leasing company, and then lease the aircraft from them.

Industry experts say Tiger's decision to go straight to the manufacturer is partly because lease prices have risen by 15 per cent in the past year, with higher interest rates and demand from budget airlines outstripping supply.

These airlines normally opt for single-aisle aircraft, which now cost about $500,000 a month to lease.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Tiger Airways is great!

but a word of caution, as its free seating, be prepared for the mad rush for seats, especially with the group tours from China :eek:

they give KIASU a new definition!

Business Times - 13 Dec 2004

Jetstar Asia launches inaugural flight to Hong Kong

SINGAPORE - The first flight of Qantas-backed budget airline Jetstar Asia departed Singapore for Hong Kong on Monday, raising the number of no-frills airlines based in Singapore to three.

The Airbus A320 took off at 3:20 pm from Changi Airport with a full load of 180 passengers and six crew members on board.

Jetstar Asia Pte Ltd which is partly owned by Australia's Qantas Airways Ltd will fly for the first time to Taiwan on Dec 16 and Thai beach resort Pattaya on Dec 20.

Flights to other regional destinations - Shanghai in China, Manila in the Philippines, and Jakarta and Surabaya in Indonesia - will be available from January 2005 onwards.

Jetstar's inaugural flight comes two months after Singapore Airlines-owned Tiger Airways took off, and six months after Singapore-based Valuair began operations.

Singapore has welcomed budget airlines and is building a terminal catering to discount carriers, expected to be completed in early 2006 at a cost of 45 million Singapore dollars.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

This story was printed from TODAYonline

Taufik adds star power to Jetstar Asia launch

Third Singapore-based budget airline takes off from Changi

Tuesday • December 14, 2004

Ted Chen
tedchen@newstoday.com.sg

SINGAPORE IDOL winner Taufik Batisah was the star guest at the launch of another rising star's inaugural flight to Hong Kong yesterday.

The 23-year-old singer was on hand to send off a planeload of excited Jetstar Asia travellers.

The newly-famous lad belted out several songs, wowing more than 300 people, including Minister of State for Finance and Transport Lim Hwee Hua, the guest of honour at the ceremony held to officiate the launch of Jetstar Asia's maiden flight.

Also present at the event was Mr Geoff Dixon, chairman of Jetstar's parent company, Qantas Airways.

Congratulating JetStar on its inaugural flight, Mrs Lim said the setting up of Jetstar Asia as a Singapore-based carrier was "testimony to the close relations between Singapore and Australia".

She noted that Qantas was the largest foreign carrier based at Changi, flying to Singapore from six Australian cities on 45 weekly passenger services, of which more than half go on to London and Frankfurt.

She said the latest investment by Qantas enabled it to tap into the wider aviation market in Asia.

Aggressive pricing by budget airlines like Jetstar are pushing scheduled carriers like Singapore Airlines (SIA) to cut fares.

In what market-watchers see as a reaction to the low promotional prices offered by the new carriers, including Jetstar, SIA has slashed its airfares between Taipei and Singapore by 85 per cent.

Some have called this move anti-competitive, which SIA has denied.

However, Mr Dixon, not known for his reticence, refused to be drawn into the debate. Responding to queries from the media, all that Jetstar's chairman would say was that he found SIA's move "interesting".

"They're out there competing. The depth of the cuts are quite large," he said.

Jetstar Asia's first flight to Hong Kong will be followed by its first flight to Taiwan this Thursday and to Pattaya on Dec 20.

Additional flights to Shanghai, Manila, Jakarta and Surubaya will start from next month.

The airline is the third Singapore-based low cost carrier to launch its operations and is also the ninth new airline to start operations at Changi Airport this year.

Copyright MediaCorp Press Ltd. All rights reserved.

This story was printed from TODAYonline

Valuair's new ad campaign aims for the funny bone

Tuesday • December 14, 2004

ADVERTISING can do amazing things.

It allows marketers with money to buy attention.

Buy enough attention, the thinking goes, and you can increase distribution, raise prices, and simultaneously boost market share.

Imagine how much more effective ads can be when they tickle your funny bone.

Such advertisements do not just convey a message, usually exhorting viewers to spend, they gain the audience's attention through sheer entertainment value.

Going by such criteria, Valuair's latest ads by Grey Global Group have "winner" written all over them.

The agency won the Valuair account recently in a pitch involving two other agencies.

The new brand strategy developed by Grey will position Valuair as the "smart way to fly" with a new tagline: Fly Smart. — Shobha Tsering Bhalla

Copyright MediaCorp Press Ltd. All rights reserved.

Business Times - 14 Dec 2004

Jetstar Asia's maiden flight takes off for Hong Kong

By VEN SREENIVASAN

(SINGAPORE) Jetstar Asia Airways took off from Singapore Changi Airport on its maiden flight yesterday, making it the third discount carrier to take to the skies from the world's 7th busiest airport.

Some 300 people, including the Minister of State for Finance and Transportation, Mrs Lim Hwee Hua, Australian High Commissioner Gary Quinlan, and Qantas and Jetstar Asia chairman Geoff Dixon watched 3K005 take off for Hong Kong at 3.20pm with a full load of 180 people on board.

All the passengers paid the week-long promotional fare of $48 for a one-way ticket. After that, tickets will start at $88 each way.

Jetstar Asia, which will have daily flights to Hong Kong, will be in direct competition with Valuair and Tiger Airways, which also operate out of Changi. Just across the Causeway, it faces competition from Kuala Lumpur-based Air Asia and Bangkok-based 1-2-Go.

Following the launch of the Hong Kong flights, Jet star Asia will start its daily flights to Taipei this Thursday, followed by the Thai beach resort of Pattaya next Monday.

Flights to Shanghai, Manila, Jakarta and Surabaya will start from next month.

The airline currently has three Airbus 320 planes, and will take delivery of at least four more next year. The airline said its www.jetstarasia.com website received over 3 million hits during its first week of sales operations. The online bookings, coupled with call centre reservations (6822-2288 in Singapore) and SingPost payment facilities, have accounted for massive interest in its initial destinations over the peak holiday period, it said.

With the launch of Jet star Asia, Changi Airport is now served by 75 airlines operating more than 3,700 flights to over 170 cities in 55 countries. It is the 5th budget airline flying into Hong Kong International Airport, after Valuair, Cebu Pacific of the Philippines, Orient Thai and Australian Airlines.

Besides Qantas' 49 per cent holdings, Jetstar's other shareholders are Temasek Holdings, which has a 19 per cent stake, and businessmen Tony Chew and Wong Fong Fui, who have 21 per cent and 10 per cent respectively.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Time is GMT + 8 hours
Posted: 14 December 2004 2244 hrs

2004 is the year low-cost carriers take off in Singapore
By Michael Lim, Channel NewsAsia

SINGAPORE : 2004 will go down in airline history as the year low-cost carriers took off in Singapore.

Four have set up shop here over the past 12 months alone and their presence has sparked off what is known as budget tourism.

These low-cost carriers have created quite a buzz but once the novelty dies off, the challenge is for them to survive the intense competition.

Low-cost carriers may be new but Singaporeans appear to have taken to them in a big way.

Still, there is no doubt that competition is highly intense and some industry watchers say consolidation is just a matter of time.

"I don't think its big enough for five. In the US there is only one successful carrier Southwest Airline. Later I think there will be some consolidation in the industry. In fact for airline industry economies of scale is very important. The bigger the scale is, the bigger the cost saving," said Gary Zhang, research analyst with Sun Hung Kai Research Hong Kong.

Nicholas Ionides, regional managing editor with The Flight Group agrees.

He said: "I think it is inevitable that some of them will succeed and some of them will fail. But consolidation will happen eventually. There will be a lot of little guys and then there will be a couple of big ones. That has happened in Europe."

Malaysia's AirAsia is seen as one key player in the sector.

It has been expanding aggressively, setting up associate airlines in Thailand and Indonesia.

But its rivals are also looking at spreading their wings.

Less than a year into its operations, Singapore's first budget carrier Valuair is planning to expand its fleet and services.

It's now looking at flying to destinations up to eight hours away from Singapore, and that could take them to India and China.

Sim Kay Wee, Valuair's CEO said: "We are looking at adding one to three more A320s and we are ambitiously studying possibly a wide body jet to go further afield."

With low-cost carriers in the picture, premier airliners like SIA and Cathay Pacific may be tempted to be drawn into a price war to keep their turf.

But analysts say there is room for both types of carriers to grow.

"They are not going to kill the existing airlines. That has got to be made clear, especially as they develop more into Asia in particular. You will see the lines drawn between the low-cost airline and the more traditional airline. There is room in the market for both and they will both thrive and survive," said Mr Ionides.

Valuair's CEO added: "Down the line, I see a high of seven percent to eight percent passenger growth in Asia. The market is big enough to absorb the capacity given out by low-cost carriers."

And what that means is that air travellers will have a wider choice when it comes to booking their flights. - CNA

Copyright © 2004 MCN International Pte Ltd

Tiger Airways, which started flying in September this year, now has two aircraft and goes to Bangkok, Hat Yai and Phuket.

here they are (I'm on one of them :D )

http://files.photojerk.com/RafflesCity/tiger.jpg

^
Thats so cool......:D

Business Times - 15 Dec 2004

Jetstar Asia expects to be profitable in 1-2 years

(HONG KONG) Jetstar Asia, the international budget unit of Qantas Airways, said it expects to make a profit in one to two years.

The Singapore-based airline, which on Monday started flights to Hong Kong, will be profitable 'within a short period of time', Con Korfiatis, Jetstar Asia's chief operating officer, said in a television interview in Hong Kong yesterday.

Jetstar Asia is the third low-cost airline to operate out of Singapore after privately owned Valuair and Tiger Airways, which is controlled by Singapore Airlines. It also faces competition from other budget carriers in the region, including Kuala Lumpur-based AirAsia Bhd and Bangkok-based 1-2-Go.

Passenger traffic in South-east Asia, which has a combined population of about 500 million people, is forecast to grow an average 6.1 per cent each year until 2023, compared with a global average of 5.2 per cent, according to Boeing. the world's second-largest maker of commercial planes.

Jetstar Asia will start daily flights to Taipei on Dec 16 and to Pattaya in Thailand on Dec 20. It also plans to start services to cities including Shanghai, Jakarta and Manila from January.

'We're interested in more destinations in China. We're also interested in Vietnam and more destinations in Thailand and Indonesia,' Mr Korfiatis said.

The airline, which is starting operations with four leased Airbus A320s, will have another four by the end of next year. The A320 can seat 150 passengers and has a maximum range of 3,000 nautical miles.

Singapore's investment company Temasek Holdings owns 19 per cent of Jetstar Asia. Singapore businessmen Tony Chew and Wong Fong Fui hold a combined 32 per cent stake.

Temasek, which is the majority shareholder of Singapore Airlines, also holds 11 per cent of Tiger Airways. - Bloomberg

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Dec 17, 2004
All eyes on Jetstar debut touchdown in Taiwan
Local carriers and aviation watchdog monitor budget airline's first flight

By Lawrence Chung
Taiwan Correspondent

TAIPEI - SINGAPORE-based Jetstar Asia made its inaugural flight to Taiwan yesterday, landing at Chiang Kai-shek International Airport at 5.30pm.

The budget airline's first such flight was fully loaded with 175 passengers. It was 80 per cent full for its return journey to Singapore an hour later.

Officials from Jetstar, Singapore's representative office in Taipei and Taiwanese aviation authorities took part in a ceremony to celebrate the arrival of the budget airline, which was closely watched by major Taiwanese carriers.

Mr Con Korfiatis, chief operating officer of Jetstar Asia, said at the ceremony that no-frills budget airlines were a 'revolutionary concept in the air-travel business'. Not everyone wanted to have meals and entertainment during short-haul flights, and by cutting these services Jetstar was able to provide affordable airfares. Some passengers concurred.

'Because the price is so low, I am willing to forgo the frills during a short trip,' said office secretary Nancy Chen.

Jetstar made its debut in Taiwan with a promotional offer of NT$1,788 (S$90) for a one-way ticket between Taipei and Singapore during its first week of operation. The price will be raised to between NT$2,350 and NT$7,399 later, depending on the travel season.

The ticket pricing was immediately challenged by Singapore Airlines, which countered with an even lower price of NT$1,688 for round trips between December and March, with Christmas, New Year and Chinese New Year holidays being the black-out periods.

Normal prices offered by regular airlines range from NT$7,000 to NT$16,000.

While local carriers admitted the low prices would definitely have an impact on the local aviation industry, they did not think it would be sufficient to threaten them.

'The targeted customers are quite different,' said Mr Roger Han, spokesman for Taiwan's largest carrier, China Airlines. 'Not everyone is willing to take no-frills flights.'

He said that international airfares in Taiwan had already been kept low for a long time due to relatively low labour costs.

Officials of other carriers in Taiwan said they were on the alert but not too worried about the impact of budget airlines.

But the Taiwanese aviation regulator is keeping a watchful eye on Jetstar.

Said Mr Billy Chang, director of Taiwan's Civil Aeronautics Administration (CAA): 'The arrival of budget airlines is good for consumers. But with a one-way ticket at just NT$1,788, I wonder these airlines can make any profit even if all the seats are sold out.'

He said the CAA would monitor the airlines' maintenance of its fleet.

Jetstar said it has a clean record as far as flight safety is concerned.

Jetstar Asia is the international budget unit of Qantas Airways. Singapore investment company Temasek Holdings owns 19 per cent of the airline.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Business Times - 17 Dec 2004

Star Cruises eyeing stake in Valuair?

Company's plan to unveil 'strategic investment' adds fuel to speculation

By VEN SREENIVASAN

IS Star Cruises investing in Singapore discount carrier Valuair?

Weeks of market speculation have gone into overdrive in the wake of the listed cruise liner operators' decision to send out invites to a press conference next Monday, saying that it would be announcing a 'strategic investment in a leading player in Singapore's travel and leisure sector'.

'This investment extends Star Cruises' commitment to Singapore, where it has been a major contributor to the country's cruise industry since it was launched in 1993,' the company said in its invitation.

While no details or numbers were mentioned, market sources tell BT that Star Cruises is investing US$15 million in the discount carrier.

If so, this would be the second round of capital raising for Valuair, which raised some $33 million during its initial start-up phase. Among its key investors are online travel bookings specialist Asiatravel.com, which has pumped in some US$4 million in the airline, for a total stake of 10.8 per cent.

Its other shareholders include its chairman Lim Chin Beng and its three executive directors Arthur Lim, Jimmy Lau and Natasha Foong. Also with stakes in the company are lawyer Sat Pal Khattar, Hong Kong-based Wuthelam Holdings, Credit Suisse First Boston's managing director Chan Wai Kheong and various British Virgin Islands-registered venture funds.

Valuair officials were tight-lipped when asked about the speculation of a capital injection by Star Cruises.

Star Cruises Ltd, which is quoted on Clob International in Singapore, is controlled by Resorts World. Resorts World is a subsidiary of sole Malaysian casino group Genting.

Last month, Star Cruises said third-quarter profit fell 10 per cent as expenses and finance costs increased. Net income fell to US$46.4 million, or 0.81 cent a share, from US$51.6 million, or 1.04 cents, a year earlier.

Following its takeover of Norwegian Cruise Line - which operates mainly in the Caribbean - in early 2000, Star Cruises is the third largest cruise company operating a combined fleet of 18 ships with over 23,000 lower berths.

Valuair operates three Airbus A320 aircraft to Bangkok, Hong Kong and Jakarta.

It is expected to take delivery of its fourth plane in February, just about the time it expects to announce new routes. It will take delivery of two more planes at the end of next year, and another two in 2006.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Flight review from Skytrax website......

Valuair - by Gan Yung

11 October 2004

Very friendly, cheerful and bright inflight service. Costs of snacks and refreshments are included in the fares which are slightly higher than Tiger Airways' fares but lower than Singapore Airlines' fares. Flying with Valuair is good value for money if you consider on Tiger Airways, you still have to pay for snacks and beverages even if you have paid S$280 for a return trip while Valuair removes that worry for you. Valuair's inflight magazine is an official destination guide magazine called The Real Destination in different Valuair's destination versions. Valauir provides you napkin too. However onboard Tiger Airways, you find no napkin and no inflight magazine.

19 December 2004

Malaysian AirAsia stamps its dominance as Asia's biggest budget carrier

KUALA LUMPUR : Malaysian discount carrier AirAsia is to buy another 40 Airbus aircraft and launch flights to China by March 2005 to maintain its position as Asia's leading budget airline.

"We will exercise the option to buy another 40 A320 jets. And if the price is good, we will (further) increase the number of Airbus jets," AirAsia chief executive Tony Fernandes told AFP.

His comments follow AirAsia's signing on Friday of a deal to buy 40 A320 jets valued at 2.5 billion dollars from Europe's Airbus, which beat out US aerospace giant Boeing for the contract.

The new aircraft would be introduced gradually into AirAsia's entire fleet, including its Indonesian and Thai subsidiaries, with the first due for delivery in January 2006.

The purchase is part of plans for regional expansion as the carrier looks to the Chinese market.

Fernandes said Chinese aviation authorities had given AirAsia preliminary approval to fly to China and expected to start flights by March.

The airline is in the midst of securing approvals to fly to key Chinese cities such as Xiamen, Chengdu, Guangzhou, Chongqing and Hainan from Bangkok through its subsidiary Thai AirAsia.

Fernandes said the first destination in mainland China would likely be Xiamen. AirAsia already flies to Macau.

Analysts said AirAsia's entry into China would boost its revenue given strong trade ties and the 2008 Olympic Games in Beijing.

Malaysia was China's seventh-largest export market last year, while the mainland was Malaysia's fourth biggest.

Azrul Azwar, senior economist with MIDF Bhd., told AFP the purchase of new jets would ensure AirAsia remained the dominant discount carrier in Asia compared with rival budget airlines operating in Singapore.

"They will have the muscle and capacity to be Asia's number one," he said.

AirAsia currently has 26 Boeing 737 aircraft which will be phased out.

Azrul said a bigger fleet would help the carrier, which started in 2001 with just two aircraft, to expand the number of routes and increase passenger volume.

"Their revenue is expected to increase," he said.

Azrul described the China routes as "niche routes" since premier carriers shy away.

"It will definitely contribute to earnings," he said.

Fernandes said Boeing could learn a lesson from European rival Airbus.

Boeing Commercial Airplanes' marketing vice president Randy Baseler had said the US manufacturer had not been able to clinch the AirAsia deal mainly because Airbus had undercut them.

"This is business. Boeing should study why they lost. You (Baseler) sit there and blame everybody," Fernandes said.

Fernandes said since Airbus gets more orders, it was able to increase production, reduce costs and build bigger market share.

Launched as a budget carrier in December 2001 with just two aircraft, AirAsia has defied the sceptics to become a significant player in the air industry and imitated by startled national carriers.

Fernandes however said he was not worried about competition from the new Singapore-based budget carriers.

"Look ValuAir started in May, they still have only two aircraft. Tiger Airways has only two also and Jetstar has one," he said.

AirAsia's sharp takeoff has drawn the attention of national carriers in the region, with two having launched their own Singapore-based budget airlines in AirAsia's slipstream this year.

Australia's Qantas has a 49 percent stake in Jetstar Asia while Singapore Airlines backs Tiger Airways.

A third, ValuAir, was started by former a Singapore Airlines managing director, Lim Chin Beng.

Analyst Azrul said the Malaysian government should decide soon on whether it would transform the former Subang Airport into a regional low-cost hub, something which AirAsia is seeking.

"Subang is ideal as a low-cost carrier hub. We should decide soon since Singapore is trying to create a similar hub in the republic. We should not lose out," he said. - AFP

Copyright © 2004 Agence France Presse. All rights reserved.

Time is GMT + 8 hours
Posted: 20 December 2004 1245 hrs

Star Cruises, Valuair announce pact

SINGAPORE : Star Cruises and Valuair have announced an alliance that will see the Malaysia-based cruise operator become the Singapore budget carrier's largest shareholder.

The amount of Star Cruise's investment in the airline was not disclosed.

Under the pact, the two companies will coordinate operations and jointly market fly-cruise packages from Singapore, Dow Jones Newswires reported.

With the latest investment, Valuair plans to expand its routes to serve the pan-Asia region including the China and India markets.

The report quoted industry sources as saying Valuair may buy wide-body airplanes capable of flying to destinations such as Sydney in Australia and Taipei in Taiwan.

Valuair currently flies to Bangkok, Hong Kong, Jakarta, and Perth. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 20 Dec 2004

Tiger Airways to double fleet, add more flights

SINGAPORE -Tiger Airways will be doubling its fleet next month by putting two new Airbus A320 jets into service and adding new destinations for the benefit of travellers from Singapore.

The two new aircraft will be used by Tiger Airways to add more services to both Bangkok and Phuket.

Tiger Airways currently operates three daily flights to Bangkok and one daily service to Phuket with flights operating between Singapore and Bangkok.

Tiger Airways will be offering a massive 10,000 low fare seats to both Phuket and Hatyai from Singapore for travel in January 2005 at the low fare of just $48.88 (one way).

The seats will go on sale from 22 December 2004 to 2 January 2005.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

20 December 2004

Tiger Airways offers 10,000 tickets to Thailand at US$30 each

SINGAPORE : Singapore-based Tiger Airways said on Monday it will offer 10,000 one-way tickets to two popular Thai destinations, the resort island of Phuket and town of Hatyai in the south, for US$30.

The promotional fares, which exclude taxes, is for travel in January and reservations via the carrier's website at www.tigerairways.com or through its call centre can be made starting Wednesday, it said in a statement.

A company spokesman told AFP the carrier is now guaranteeing 10,000 tickets to the two Thai destinations would be sold at S$48.88, or US$30.

During non-promotional periods, fares for a one-way trip start from $50 and increase gradually as demand for tickets increases, he said.

Tiger Airways also announced plans to launch new routes and expand flight services to Phuket and Bangkok when it puts two new Airbus A320 jets into service in January.

"The new flights will be a windfall for savvy travelers," said president and chief executive officer Tony Davis.

"Adding extra flights will also bring even more travelers to Singapore, creating jobs and encouraging regional tourism," he said.

Tiger Airways, one of three Singapore-based budget carriers, currently offers three daily flights to Bangkok and one daily service to Phuket and Hatyai.

The carrier is 49-percent owned by Singapore Airlines.

The other shareholders are the founders of European no-frills carrier Ryanair, state-owned investment agency Temasek Holdings and American investors Indigo Partners. - AFP

Copyright © 2004 MCN International Pte Ltd

Dec 21, 2004
Fly-cruise deals from Star Cruises, Valuair

STAR Cruises' investment in Valuair and the budget airline's plans to extend its flying range have spawned a new series of travel packages that could see Singapore develop into a centre for cruise holidays.

From next year, Valuair and Malaysia-based Star Cruises - which has bought a stake of more than 20 per cent in the airline for an estimated $20 million - will offer combined fly-cruise packages.

Valuair flies to destinations within five hours of Singapore. The Star Cruises investment is part of a capital-raising move that will help the airline purchase bigger aircraft able to fly up to seven hours to more points in Asia, including cities in Japan.

The airline now flies to Jakarta, Bangkok, Hong Kong and Perth, and hopes to add points in China and India to its schedules soon.

Fares and other details of the fly-cruise deals will be revealed later.

At a joint press conference yesterday, Star Cruises' chief operating officer Chong Chee Tut said the deal will allow Star Cruises to cater for more flexible itineraries and different budgets.

Singaporean travellers, Valuair's CEO Sim Kay Wee added, can also look forward to round-trip deals that allow them to fly one way and sail the other.

The companies said in a statement: 'With Valuair's plans to expand its routes... the number of fly-cruise passengers into Singapore is expected to grow significantly.'

Valuair's chairman and founder Lim Chin Beng said the cooperation will develop Singapore as a 'world-class cruise centre'.

It is the first time Star Cruises, which operates 17 ships under the Star Cruises, Norwegian Cruise Lines, Orient Lines and Cruise Ferries brands, has invested in an airline.

Valuair, which started operating in May, raised about $30 million from its first fund-raising exercise in October last year. Mr Lim said the airline is also in talks with other potential investors.

Mr Chong, meanwhile, did not rule out the possibility that the company could work with other regional budget carriers. -- KARAMJIT KAUR

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Dec 21, 2004

SIA slashes fares to four cities
Airline's move to 'offer good value' undercuts budget carriers' prices

By Karamjit Kaur
Transport Correspondent

SINGAPORE Airlines (SIA) has slashed fares to Bangkok, Jakarta, Hong Kong and Taipei, in its strongest signal yet that it will not be outdone by budget carriers.

Limited round-trip tickets to the four cities are going for $98 each, for passengers travelling in pairs, from Jan 3 to 31.

It is the lowest fare SIA has offered out of Singapore since Valuair - the first budget airline to operate here - took to the skies in May.

Previous promotions for travellers in pairs included a $128 round-trip deal to Bangkok and Jakarta, $248 to Hong Kong and $298 to Taipei.

The $98 deal undercuts the fares offered by Valuair, Tiger Airways and Jetstar Asia - the three Singapore-based budget airlines.

Valuair has a minimum fare of $138 to Bangkok, $158 to Jakarta and $238 to Hong Kong.

For Tiger Airways - SIA's low-cost arm - the lowest fare to Bangkok is $100.

Jetstar Asia charges a starting round-trip fare of $236 to Taipei and $176 to Hong Kong.

So why the steep cut by SIA and why all four destinations at once?

The airline's spokesman, Mr Stephen Forshaw, said: 'New entrants in the market will not have a monopoly on initiating special offers.

'SIA will be a strong competitor and will offer good value fares with exceptional service.'

On whether the name of the game is 'match the fare', he said: 'We're not here to just match what the others do. SIA is a market leader, and we will lead the market on price offers when we see the opportunity.'

The $98 deal puzzles Valuair's chief executive officer, Mr Sim Kay Wee. He said: 'It would appear that SIA is moving away from its premium airline position by underselling its product, and straying into the arena of budget carriers.

'I am quite puzzled as to why it would do this esp- ecially since it has said before that it will not compete with budget carriers.'

On whether Valuair will fight back and cut its fares too, he said: 'We are always very competitive. We will have to study the SIA offer and see how best to keep our market share.'

It is clear what SIA's strategy is, said aviation analyst Vincent Ng of Standard & Poor's Asian Equity Research.

'The intention here is to ensure that budget-conscious travellers will still check SIA fares and not assume budget airlines will be cheaper.'

With planes usually 75 to 80 per cent full on average, he noted that it does not cost airlines very much to offer super-low fares for seats that would be empty anyway.

Tiger Airways and Jetstar Asia could not be contacted for comments.

In a separate statement yesterday, Tiger said it would offer 10,000 seats to both Phuket and Hat Yai for travel next month for $48.88 (one way).

Mr Tony Davis, its president and chief executive officer-designate, said: 'We don't believe in offering a very limited number of seats at gimmicky prices.'

Bookings open tomorrow.


Copyright © 2004 Singapore Press Holdings. All rights reserved.

i must tell my sister about this..she wants to go HK! :lol:

i must tell my sister about this..she wants to go HK! :lol:

Emm...in fact my sister also message me about this a min ago......:lol:

from the sounds of it..i think all tickets will be snapped up viciously! :eek:

from the sounds of it..i think all tickets will be snapped up viciously! :eek:

haha... the website is very sloooooooooooooooooooooooow now. Booking starts tomorrow. I think.

from the sounds of it..i think all tickets will be snapped up viciously! :eek:

Haha......Does that mean there will be higher traffic volume at Changi next year?? :lol:;)

maybe the January season is slow..so they use this to kickstart the year also :cool:

maybe the January season is slow..so they use this to kickstart the year also :cool:

Wow.....i can see that with Jetstar, Tiger and SIA promotion (plus a load of others including Cathay etc)......I can expect some good figures......:yes:

raffie! i am going home tomorrow!..get ready for snowy pics:D

raffie! i am going home tomorrow!..get ready for snowy pics:D

Sounds great........:yes::D

Business Times - 21 Dec 2004

Hock Lock Siew
Chance for Star Cruises to make Valuair deal fly

By EDDIE TOH

STAR Cruises, traded on Singapore's Clob International and controlled by the sole casino group in Malaysia, has made another bet on the tourism business.

The world's third biggest cruise liner yesterday confirmed BT's report last week that it intends to take a one-fifth stake in Singapore's fast-growing budget carrier Valuair. Star Cruises, controlled by Kuala Lumpur-listed Resorts World, which in turn is a subsidiary of listed Genting, said the alliance would help create fly-cruise packages at attractive prices.

The liner did not disclose the investment cost, but sources estimate the price tag to be in the region of US$15 million. But will the Valuair stake be another financial albatross for the debt-laden liner, or will it help boost earnings?

On the face of it, the deal does have positive features. Valuair could help ferry more regional tourists to Singapore. They could then take Star Cruises' liners to tourist spots in the region.

There is synergy between the two groups as Star Cruises could also channel passengers to the fledgling budget airline. More than 130,000 inbound tourists out of the some eight million arrivals expected in Singapore this year from countries such as Australia, Indonesia and India travel with Star Cruises. In addition, the deal will make Star Cruises the single biggest shareholder in Valuair, giving the liner some leverage in the union.

But it's still not known if debt-laden Star Cruises can afford to pump more capital into Valuair. For a start, Valuair is expected to more than double its current fleet of three planes in the next few years.

It's also unclear if long-suffering shareholders of Star Cruises will give the nod for the company to gear up further. Minority shareholders of Star Cruises have had little to cheer about since the Lim family floated the cruise business in 1997.

The share price touched its peak of US$2 in April 2000 but it has been on a downward spiral since. The share price slipped to its lowest point of US$0.07 in November 2003. Its fortunes improved this year, with the share price swinging between US$0.21 and US$0.36. It closed at US$0.225 yesterday - still a far cry from its peak.

The decline in its share price coincided with Star Cruises' purchase four years ago of Norway's NCL, the fourth largest cruise operator in the world. Although the purchase has boosted Star Cruises's fleet to 20-odd ships, it has eaten into the resources of the Genting-Resorts group. Besides having its cash hoard depleted in 2000, Resorts went into the red for the first time owing to a write-off of the goodwill in the NCL deal and the fall in NCL's share price following the acquisition. Resorts' fortunes have since brightened but Star Cruises has yet to pare down its long-term debts of some US$2 billion.

Hopefully, the investment in Valuair will help bolster Star Cruises' bottom line. The cruise operator, on its part, will need to unwind some of its debts to take full advantage of its investment in the fast-growing airline.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 21 Dec 2004

Low-cost carriers boost narrow-body jet market

Airbus A320 has been outselling Boeing 737 by 10-to-1, say sources

By VEN SREENIVASAN

(SINGAPORE) The explosive growth of low-cost carriers in Asia-Pacific has resurrected the market for narrow-bodied aircraft in the region, especially for Airbus, whose A320 has been outselling Boeing 737 planes by about 10-to-1 this year, say market insiders.

'There has been a huge fleet transformation across the region over the last five years, with LCCs creating a huge new market for single-aisle aircraft,' said Robert Martin, chief executive of Singapore Aircraft Leasing Enterprise (SALE).

'Five years ago, three-quarters of the regional fleet were wide-bodied aircraft owned by network carriers,' he said.

The proliferation of LCCs has also been a boon for operating lessors like SALE. 'If you are an LCC, you have a limited amount of equity,' Mr Martin. 'You don't want to sink it all into aircraft purchases.'

SALE, which currently has a portfolio of 60 aircraft, has leased narrow-bodied planes to most of the leading regional LCCs, including Jetstar, Jetstar Asia, Valuair, AirAsia and Air Deccan.

Meanwhile, the Sydney-based Centre for Asia-Pacific Aviation has also forecast a huge demand for narrow-bodied jets from intra-Asian air freight operators.

'Airfreight carriage in Asia is frequently a lucrative business,' Peter Harbison, the centre's managing director, noted.

'Rapid organic growth rates aside, the trend towards low-cost passenger operating models in short-haul markets which tend not to carry much cargo, due to tight turnarounds, could also boost the region's requirement for dedicated freighter aircraft. This is certainly a potential in large city pair markets which are currently served by conventional airlines. As low-cost capacity expands and changes the behaviour of all operators, so will new opportunities open up for freight carriage.'

Airbus, in its latest Global Market Forecast, predicts intra-Asian freight markets will expand by 6.4 per cent a year over the next 20 years, well ahead of passenger markets' growth of of 5.9 per cent a year.

But the biggest beneficiary of the growth in demand for narrow-bodied jets seems to be Airbus, with some 400 planes on order.

The European planemaker has just sealed a US$2.5 billion order for 40 A320 planes with AirAsia, and is now negotiating to sell 30 planes worth US$1.8 billion to India's Air Deccan. Its planes are used by 27 carriers in the Asia-Pacific, including Singapore's Tiger Airways, Jetstar Asia, SilkAir and Valuair.

Mr Martin expects the proportion of narrow-bodied to wide-bodied planes to hit 50:50 in the medium term, with Boeing trying to narrow the gap with its European rival.

'Recently Airbus has been very aggressive, but we think 2005 will be a critical year for campaigns, with Boeing preparing for a big push.'

But he pointed out that once airlines had chosen a plane-type, it would be difficult to force them to make a switch.

Asked about the world's other two narrow-bodied planemakers' prospects, Mr Martin said: 'Embraer and Bombardier have to get their prices right to get into this market. They are not using the operating lessors as effectively as Airbus.'

But Mr Martin said that SALE was looking into more procurements next year and was looking to acquire Airbus, Boeing and Embraer jets for delivery when its current order numbers run out in May 2006.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

This story was printed from TODAYonline

Air of opportunities

Asia's airlines cannot afford to miss budget market

Wednesday • December 22, 2004

SYDNEY — With US and European skies crowded with low-cost carriers, Asia is a sure bet as the next frontier for cheap and cheerful travel. But the question on the mind of investors is who will lead the pack.

A flurry of new airlines backed by existing full-service carriers including Thai Airways International and Malaysian Airline System are likely to emerge, analysts say.

Others will have the backing of new investors looking to replicate the success of Australia's Virgin Blue Holdings and Ireland's Ryanair Holdings.

Airlines in Asia are moving away from questioning whether low-cost carriers will succeed in the region to asking if they can afford to miss out on the opportunities, said Centre for Asia Pacific Aviation managing director Peter Harbison.

"I think there will be more subsidiaries (of full-service carriers) coming into the market," he said.

However, investors looking at Singapore as either a base or travel destination should think twice because three low-cost carriers — Tiger Airways, ValuAir and Jetstar Asia — are already based here.

Malaysia's first budget carrier, AirAsia, also operates seven flights a week to Singapore.

Over-populating Singapore — a major hub for international air travel — with budget airlines would risk a brutal fare war and with fuel prices ever susceptible to volatile swings, the onus is on industry executives to do their homework if they plan on being around for the long haul.

Low-cost carriers with financially strong parents such as Tiger, which is 49-per-cent-owned by Singapore Airlines (SIA), and Jetstar Asia, which is 49-per-cent-owned by Qantas Airways, have a better chance of outperforming their peers and surviving for the long term.

The two low-cost carriers should also benefit from their parents' solid bargaining power when it comes to fuel.

SIA has hedged about 40 per cent of its fuel requirements at US$34 a barrel for the 12 months ending March 31, 2005, while Qantas has hedged 70 per cent of its fuel at US$32 a barrel for the year ending June 30, 2005.

"The key thing will be critical size and I think the (low-cost) airlines to survive will need to have a solid base in terms of financial backing, hubs and routes," said Shaw Stockbroking analyst Brent Mitchell.

Australia's flag carrier, Qantas, recently joined the fray by launching its second low-cost carrier, Jetstar Asia, less than seven months after its first budget carrier Jetstar, which operates domestic routes.

Jetstar Asia has commenced a daily flight from Singapore to Hong Kong, and will shortly begin flying to Taipei in Taiwan, and Pattaya in Thailand.

It wants to be the first low-cost carrier to fly to Surabaya in Indonesia, Shanghai in China, and Manila in the Philippines.

Qantas has been a little slow to enter the low-cost market in Asia but is working hard to catch up, according to DBS Vickers Securities analyst Chris Sanda.

"They're doing what they can as far as expanding much more aggressively than the others, which means that they're doing the right thing but at the same time they have a higher risk profile," he said.

While the Asian aviation market is ripe for low-cost carriers, investors are divided on how many will take off next year.

A Sydney-based transport analyst expects the number of players to more than double to 10 next year, with several others to emerge in subsequent years.

But Mr Sanda said "the market is already saturated".

AirAsia has built up its fleet to 23. It is looking to buy 40 new aircraft in the near future to service new destinations that may include the Philippines, China and India.

Tiger recently commenced flights to Bangkok, Phuket and Hat Yai in Thailand, with plans to fly to as many as 10 destinations in the first year.

Its closest home-grown rival, Valuair, has been operating flights to Bangkok, Hong Kong and Jakarta since May. The privately owned Valuair also recently started services to Perth, Australia.

With Singapore brimming with low-cost carriers, the next and most obvious base for operators appears to be Macau, a special administrative region of China with a booming casino market. Air Macau is the only airline flying from the Chinese territory at present.

"Macau is like the back door to China here, in the sense that Macau in its own right is a growing, booming market benefiting from globalisation of the entertainment industry," said Mr Sanda.

After a rapid rise in Australia over the past four years following the collapse of Ansett, Virgin Blue is seeking growth in Asia, possibly by launching a low-cost regional carrier.

Virgin Blue has held talks with Air Macau's shareholders about operating a low-cost carrier from Macau. The much-touted push of the Richard Branson-founded Virgin Blue into Macau is a "good option", said a Sydney-based analyst.

But as aviation history shows, rapid growth often comes at a price.

The big and more financially stable budget carriers that vigilantly follow the low-cost model have a better chance of succeeding than others. The minnows will either be taken over or eventually crash-land, according to analysts.

Consolidation among the low-cost carriers could emerge next year, said Morgan Stanley analyst Chin Lim.

Mr Harbison at the Center for Asia Pacific Aviation, however, believes there is ample room in the Asian market for several more full-service and low-cost carriers, saying: "This market has got so much potential, it's just untapped." — Dow Jones

Copyright MediaCorp Press Ltd. All rights reserved.

22 December 2004

A-Sonic gets 59.8% of Australian regional carrier Skywest
By Thomas Cho, Channel NewsAsia

SINGAPORE : Aircraft retrofitting solutions company, A-Sonic Aerospace, has obtained control of 59.8 percent of Skywest at the close of its general offer for the Australian regional carrier.

The offer expired on Tuesday.

In September, A-Sonic made an offer for all of Skywest at 20 Australian cents a share.

It made the bid through its investment vehicle CaptiveVision.

A-Sonic has announced plans to start a new budget airline in China with Guangdong China Travel Service Holdings.

Operations are expected to begin in the second half of next year. - CNA

Copyright © 2004 MCN International Pte Ltd

December 24, 2004

Fragrance banks on budget travel

Local hotel chain aims to list next year; preliminary prospectus lodged this week

By Chua Kong Ho

MR James Koh's five-storey office block at 101 Joo Chiat Road is right opposite Khalid Mosque, which made the news recently when it bought eight adjacent shophouses as a "moral buffer' from the nightlife outlets and massage parlours springing up in the area.

But tell that to Mr Koh, owner of the Fragrance chain of budget hotels, and all he gives is a shrug.

With five hotels in Geylang, two in Balestier and one in Joo Chiat, the 41-year-old businessman is used to seeing his business lumped together with the sleaze trade. "It's a misconception. We have a lot of tour groups from countries such as Malaysia, Thailand and increasingly China staying with us. "The short-term guests make up only a minority of our clientele," he told Streats in his Joo Chiat office.

Independent travellers from as far away as Zimbabwe, Canada and Nigeria also stay in his hotels.

It's an exciting time to be running budget hotels, he says. There has been an explosion in the number of travellers from neighbouring countries served by budget airlines, and Fragrance's eight hotels are on average 80 per cent full.

He's planning to take the company public, the first local budget hotel chain to list on the Singapore Exchange. Fragrance lodged its preliminary prospectus on Wednesday and is hoping to list early next year.

"Budget airlines are definitely good for us," he said. "It's very cheap to travel here now. It probably costs more to buy a shirt nowadays."

And when the budget airlines finally get their rights to fly to countries such as Myanmar and Vietnam, more tourists will travel to Singapore for the first time, benefiting operators like Fragrance, where a standard room costs $60 a night.

Another two Fragrance hotels are being built - one in Selegie Road and the other in Balestier Road - and when they are completed, the group will have just under 1,000 rooms in the $50- to $60-a-night bracket.

The company, whose two businesses are property development and hotel operations, made profits attributable to shareholders of $2.1 million last year on revenues of $28.3 million.

Mr Koh started out in the family property business in the mid-1980s before taking over the business in 1993. The Kohs are behind the Lee Hwa jewellery business, which recently listed as Aspial Corp. Brother Koh Wee Seng is chief executive of Aspial Corp.

Starting first with building semi-detached houses, then apartment blocks, Mr James Koh saw the opportunity for budget accommodation in 1996, building the first Fragrance Hotel in Geylang Lorong 20.

As a tribute to his long years helping out with the family jewellery business, he named his first hotel Ruby. He named his next four Geylang hotels Crystal, Emerald, Pearl and Sapphire.

He started working in Lee Hwa stores at age 14, graduating to running the stores and jewellery factory in his early 20s.

Mr Koh has a roll-up-your-sleeves approach to management.

When residents neighbouring one of the group's development projects raised their concerns over vibrations from the piling work going on, Mr Koh went down and attended the town-hall meeting, instead of letting the contractor handle it.

"I've learnt that when you treat people with sincerity and talk to them reasonably, 10 out of 10 people will listen."

The successful businessman also collects vintage cars. He has two 1970 model Volkswagen Beetles that he drives on Sundays. His day-to-day ride is the British-made Bentley and he is thinking of buying a 1920s Rolls Royce.

"I only drive the Beetle on the weekends. The engines can just "die' in the middle of a drive. That's why I only drive them on Sundays, so I won't be late for my meetings."

Copyright © Singapore Press Holdings, 2004. All rights reserved.

Dec 25, 2004
Valuair cuts fares for next month
Though move comes hot on the heels of similar promotion by SIA, CEO says it had been planned for some time

By Karamjit Kaur
Transport Correspondent

BUDGET carrier Valuair has cut fares to Bangkok, Jakarta, Hong Kong and Perth, two days after Singapore Airlines unveiled promotional fares to three of those destinations.

Valuair is offering round-trip tickets for $99 to Bangkok and Jakarta, $130 to Hong Kong and $310 to Perth.

But the discounts are not in response to SIA's promotional fare of $98 for limited round-trip tickets to Bangkok, Jakarta, Hong Kong and Taipei, Valuair's chief executive officer Sim Kay Wee said yesterday.

He told The Straits Times: 'We were already planning to launch the promotion during the off-peak month of January and decided to go ahead with it.

'We have a dynamic fare policy that anticipates and responds to changing market conditions, and have been practising this all along.'

Bookings for Valuair's promotion, which is valid for travel next month except during the Hari Raya Haji weekend, open tomorrow and will close on Friday.

The airline's normal minimum fare is $138 to Bangkok, $158 to Jakarta, $238 to Hong Kong and $350 to Perth.

SIA's deal - also for travel next month - is for limited seats on selected flights for passengers travelling in pairs.

In a clear dig at the airline, Mr Sim said: 'For our promotion, we do not have restrictions like two to go, and the discount fares are not confined to unfavourable flight times.'

He did not reveal the number of discount seats which will be available, but promised travellers this much: 'Being an off-peak month, they should have no problems getting the discount fares.'

SIA spokesman Stephen Forshaw said of Valuair's deal: 'The market is a competitive one, and airlines will launch special promotions from time to time.

'Our offer announced earlier this week has been very successful, with thousands of customers taking advantage of $98 return fares to Hong Kong, Taipei, Bangkok and Jakarta.'

Valuair - Singapore's first budget airline - started in May.

Since then, two more have taken off - the Singapore Airlines-backed Tiger Airways and Jetstar Asia, which is backed by Australia's Qantas.

Their low fares have forced big national carriers like SIA to cut prices, to ensure the upstarts do not steal a march on them.

Mr Forshaw said: 'SIA is determined to stake its claim in the market as a competitor on all aspects.

'Customers know they get the best service. They also know that we'll be consistently good value, and new entrants to the market don't have a monopoly on launching good promotions.'

Not to be outdone, Mr Sim said: 'Travellers should constantly visit our website and check out the good deals we offer every now and then.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

$130 is not cheap compared to SIA's $98, and if you add the +++, the price almost doubles to around $200!

$130 is not cheap compared to SIA's $98, and if you add the +++, the price almost doubles to around $200!

So the SIA one cost roughly S$167??

The valuair offer seems to be targeted at those ppl who can't get the SIA offer......:yes:

Business Times - 27 Dec 2004

AVIATION: OUTLOOK 2005
New year will do much to reshape air industry

Airlines, the travel market and airport operators will all feel the heat

By VEN SREENIVASAN

THE coming year will be a critical one for the Asian aviation sector. It could be a year when more low-cost carriers (LCCs) emerge across the continent.

It is also likely to be a critical year for national carriers which are struggling on the financial brink. And with more people getting on planes than ever before, the year could also see more industry deregulation and infrastructure outlays.

Today, there are about a dozen LCCs operating in a region where there was none in 2000.

AirAsia has already proven the critics wrong by emerging as the region's dominant LCC player. The company, which has just placed a US$2.5 billion order for 40 new Airbus 320 planes, has already made a huge impact in regional air travel. Besides flying millions of Malaysians around the country, it has also flown half a million tourists - mostly Europeans and Australians - into Malaysia in less than a year since it introduced its Thailand and Indonesia flights.

Tiger Airways, Valuair and Jetstar Asia are already doing the same, using Singapore as their base.

Analysts expect the number of LCCs in the region to double by 2006.

China and India - until now the exclusive domains of their state-owned carriers - are already seeing low-cost start-ups. In India, players like Kingfisher and Air Deccan have been placing big new orders with plane-makers.

Similar order flows will come from China when the first privately-owned LCCs take to the skies next year.

But the proliferation of LCCs is putting pressure on incumbent full-service players around the region.

In South-east Asia, Singapore Airlines is seen as most vulnerable, followed by Cathay Pacific, Thai and Malaysia Airlines.

SIA's share price has underperformed the market by 25 per cent this year on concerns that many of its routes are now rich pickings for LCCs, including its own LCC associate, Tiger Airways. This is despite the fact that LCCs currently cover less than 10 per cent of SIA's whole network, and have low frequencies on these routes.

Real or not, the fact is that the market will read the competition from LCCs as being potentially margin-eroding for incumbents.

But SIA and its legacy cohorts are not sitting still.

Many are fighting back via savvy capacity and management. For example, SIA promptly undercut both Valuair on its Perth routes and Jetstar Asia by offering cut-rate fares to Hong Kong, Taipei, Perth, Jakarta and Bangkok.

At the end of the day, there will be casualties.

As analysts point out, in the US and Europe, LCCs have been effective predators of inefficient, high-cost full-service carriers. It may be early days yet in Asia, but the chinks are already showing in some players.

But it will not be easy for the LCCs either.

Besides predatory pricing practices from well capitalised full-service players, they also have to deal with stubbornly high fuel costs.

The International Air Travel Association (IATA), which represents more than 270 carriers globally, predicted two months ago that airlines may record losses of more than US$4 billion unless fuel prices drop from record highs at above US$50 per barrel.

The impact will be even more devastating for LCCs. This is because fuel accounts for as much as a third of the total operating costs for Asian LCCs, compared to 20 per cent for full-service carriers.

But LCCs in this region have one very important factor in their favour: a huge and growing market.

South-east Asia has about 550 million people, about the same population as Europe. While more than a quarter of Europeans fly regularly, only around 10 per cent of the people in this region have been inside a plane. And this region has about a dozen LCCs, compared to almost 60 across Europe.

There is no denying that LCCs are a growth industry across Asia.

Boeing projects that passenger traffic in the region will grow an average 6.1 per cent each year until 2023, compared with a global average of 5.2 per cent.

The success of AirAsia aside, the Asian LCC phenomenon has barely graduated from the 'embryonic stage' to the 'growth stage'. It took 14 years (from 1971 to 1985) for LCCs in the US to get through these two stages. Then came the shakeout stage between 1986 and 1988.

But the pace of their growth and route expansion will also depend on the ability and willingness of Asian governments to open up their markets. In the US, the growth phase was fuelled by the 1978 deregulation of the country's domestic market.

If Asian governments are reluctant to deregulate for fear of hurting their national carriers, LCCs will be confined to an increasingly limited number of 'skinny' and crowded point-to-point routes defined by bilateral agreements. This could speed up their move towards the shakeout phase, with only the best capitalised players emerging intact when the dust settles.

Fortunately, most countries around the region are liberalising, albeit slowly.

Singapore is further ahead than the rest. With LCCs already accounting for about 10 per cent of the passenger traffic at Changi, Singapore is positioning itself to be a regional LCC hub by building its $45 million budget carrier terminal, which will be ready by early 2006.

For plane-makers, 2005 will be critical in terms of order mandates. Many industry watchers expect Boeing to go for a big push after losing out to rival Airbus this year.

And the battle is likely to be fought most intensely in the single-aisle aircraft market.

Plane-makers expect single-aisle aircraft with more than 100 seats to continue dominating the world's passenger fleet, with more than 15,100 such aircraft expected to be brought into service by 2023.

About a third of new single-aisle aircraft will be delivered to low-cost operators in the Asia-Pacific.

All in all, 2005 could be the defining year for the Asian commercial aviation market.

It could separate the winners from the losers, and differentiate the men from the boys, not just among airlines, but also travel markets, airport operators and plane-makers.

http://img160.exs.cx/img160/9518/budgeta9qk.png

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

03 January 2005

A-Sonic takes 21.1% stake in Airocean for S$27.5 million
By Michael Lim, Channel NewsAsia

SINGAPORE : Aircraft equipment supplier A-Sonic Aerospace is making yet another move to beef up its operations in China, this time by taking a stake in Airocean.

A-Sonic is subscribing to all the 110 million shares that the freight-forwarding company is placing out.

The deal is worth S$27.5 million, which A-Sonic will fund through both internal resources as well as bank borrowings.

Both A-Sonic Aerospace and Airocean are seeking to expand their operations in China.

They have already tied up for two joint ventures in China, one of which is an express courier business.

On its part, A-Sonic is looking to launch a low-cost carrier in China, while Airocean wants to set up a freighter service.

"A-Sonic, through our announcement of a LCC in last September, is looking for a passenger license. Of course, on our account, Airocean, we are seriously pursuing a freighter license just for the domestic part of China which we want to focus on; and this freighter license will serve the domestic cargo market of China," said Airocean CEO Thomas Tay.

Airocean says China's domestic express courier cargo market could potentially be worth some US$14 billion.

With Monday's deal, A-Sonic will own up to 21.1 percent of Airocean, making it the largest shareholder in the company.

And the two partners say they do not rule out forging closer links, including a merger.

"I cannot rule out this possibility. The two companies know each other no doubt for a short period of time; but we share a lot of visions together. We share the common playing field together, that is China; we share the common market together, that is the aviation industry," said Airocean's Tay.

"I would say that we are keeping all options open," A-Sonic CEO Janet Tan said.

The deal is still subject to shareholder agreement from both companies.

But for now, analysts say Airocean's logistics capabilities in China will tie in well with A-Sonic's plans for a low-cost carrier. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 07 Jan 2005

Tiger Airways adds flight to Bangkok

By VEN SREENIVASAN

(SINGAPORE) Tiger Airways said it would be adding a fourth daily flight to Bangkok from Jan 15 in response to overwhelming demand.

The budget carrier which is 49-per cent owned by Singapore Airlines (SIA) said it would offer 45,000 low-cost seats every month on the Singapore-Bangkok route for one-way fares starting at $49.98. With the addition of the extra daily flight, Tiger will have 250 flights a month between the two cities.

Tiger Airways' new CEO and president Tony Davis said his airline's services between Singapore and Bangkok had proved very popular. 'This is fantastic news for our many regular business travellers and will further strengthen tourism opportunities between the two countries,' he said. 'Tiger Airways has got off to a great start since we started operations just a few months ago and this is just the first of many new services we will be announcing over the coming weeks.'

Besides Bangkok, Tiger Airways also has daily flights to Hat Yai and Phuket. Tiger Airways, which added two new Airbus A320 planes last month, competes with privately owned Valuair and Qantas associate Jetstar Asia from its Singapore base, and Thai AirAsia, the Thai associate of the Malaysian budget carrier.

Besides SIA, Tiger Airways' other shareholders are Temasek Holdings, Phoenix-based aviation investment firm Indigo Partners, and Irelandia, the parent of UK-based budget carrier Ryanair.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 11 Jan 2005

Jetstar, Visa in tie-up to offer cheap seats to cardholders

By VEN SREENIVASAN

(SINGAPORE) Qantas associate Jetstar Asia has tied up with credit card operator Visa to offer more seats at lower prices for cardholders.

Until Feb 2, one-way airfares on Jetstar Asia from Singapore to Taipei, Hong Kong and Pattaya will be $99, $70 and $40 respectively.

During the period, one-way airfares from Hong Kong and Pattaya to Singapore are priced at HK$360 and 1,000 Thai Baht respectively, while the one-way fare to Singapore from Taipei, which is valid until Jan 20, is priced at NT$1,999 each.

Cardholders can make payment using their Visa cards on-line, through the Jetstar Asia call centre, or via select travel agencies.

'Our initial feedback has shown that Visa is an extremely popular card of choice for Jetstar Asia customers,' said Con Korfiatis, Jetstar Asia's COO.

'By partnering with a market leader like Visa, we're able to provide even more seats at better rates to more customers, and that's exactly what we strive to do with every Jetstar Asia flight, every day of the year.'

Jetstar Asia now operates twice daily round trip flights between Singapore and Hong Kong five times a week and daily round trip flights between Singapore and Taipei and Singapore and Pattaya. It will soon start services between Singapore and Shanghai, Jakarta, Surabaya and Manila.

Jetstar is 49 per cent owned by Qantas, while Temasek Holdings has 19 per cent. Its other shareholders are businessmen Tony Chew and FF Wong, who have 22 per cent and 10 per cent stakes respectively.

Jetstar is the third low-cost airline to operate out of Singapore after privately owned Valuair and Singapore Airlines associate, Tiger Airways.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Jan 13, 2005
S'pore Aircraft plans to buy up to 50 planes

By Karamjit Kaur
Transport Correspondent

THE rebound in air travel, particularly from low-cost carriers, has spurred Singapore Aircraft Leasing Enterprise (Sale) to go shopping for up to 50 new planes.

The company, which is 35.5 per cent owned by Singapore Airlines, has not placed a major aircraft order since 1999, but a surging market has prompted it to do so.

A Sale spokesman said: 'The market has picked up and we have seen a strong increase in demand over the last 12 months. We want to postion ourselves for the coming expansion.'

Demand has been so strong, some airlines say, that they are having trouble finding planes to lease.

It is all a far cry from barely two years ago when Sars, the Iraq war and terrorism threats seemed to ground the airline industry.

DBS Vickers' aviation analyst, Mr Chris Sanda, said: 'We're seeing growth in most countries in Asia. In Singapore, we've had three budget airlines formed in less than a year. Malaysia's budget airline market is expanding and we can also expect growth in countries like Vietnam and Cambodia.'

With that sort of market promise, the main question for Sale, which has a fleet of 60 aircraft, is what plane to get and how many.

Sources said the company is looking to buy between 30 and 50 new aircraft, and a Sale spokesman confirmed that it is already evaluating proposals from Airbus, Boeing and the Brazilian Embraer for single-aisle planes with more than 100 seats.

While single-aisle jets are popular with budget carriers such as Valuair and AirAsia, Sale is not just catering to them, he said.

'No doubt, an important factor in the decision to place an order is the development of the low-cost airline market, which has given the leasing industry a great boost. But there is also demand from the bigger airlines,' he said.

In 1999, Sale ordered 20 single-aisle Airbus jets, later adding nine more to the list. Fifteen have been delivered, with the rest due before May next year.

They cannot come too soon, if comments from an official from a Singapore-based budget airline is anything to go by. 'Everyone wants to add new routes and break into new markets. Competition is stiff, not just in the aircraft market, but also in getting pilots to fly the planes.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

http://straitstimes.asia1.com.sg/mnt/media/image/launched/2005-01-15/front_caas.jpg
NEW AIRPORT TERMINAL: The Civil Aviation Authority of Singapore (CAAS) has awarded a S$24.7 million contract to Sanchoon Builders to design and build the low cost terminal at Singapore Changi Airport. Work is expected to start in the first quarter of 2005 and be completed in early 2006. -- CAAS

Jan 15, 2005
Sanchoon Builders to construct S'pore's low cost airport terminal

SINGAPORE - The Civil Aviation Authority of Singapore (CAAS) has awarded a S$24.7 million contract to Sanchoon Builders Pte Ltd to design and build the low cost terminal at Singapore Changi Airport.

Sanchoon Builders is expected to start construction work in the first quarter of 2005 and completion is expected in early 2006.

The low cost terminal will have an initial passenger handling capacity of 2.7 million passengers a year.

There is scope for further expansion should more carriers want to use the terminal.

The low cost terminal is made up of two adjacent single-storey buildings connected via link ways.

This design facilitates seamless passenger flow in the single storey building, as arrival and departure procedures will be processed in separate blocks. Aside from the low cost terminal, other associated works will be carried out at the low cost terminal site, including building an open-air car park, taxiway and aircraft parking stands.

The total cost for the low cost terminal and the related works is expected to be about S$45 million.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Layout of the budget terminal(lianhe zaobao, 16/1/05):

http://img141.exs.cx/img141/8219/dscn392615bc.jpg

On the left is the arrival hall which will be linked to the departure hall(on the right) by a walkway. On the top is a carpark.

shit that is f******* gross.

17 January 2005

Tiger Airways may miss making profits in first year due to tsunami, oil prices
By Connie Tan, Channel NewsAsia

SINGAPORE : Higher fuel prices and the tsunami disaster may have upset Tiger Airways' earlier plans to turn a profit in its first year of operation.

But the budget carrier says it is still confident of soaring ahead of its Asian competitors.

On Monday, it vowed to go all out to compete on price to win market share.

Tiger Airways is reviewing its business model after last month's tsunami devastated parts of the Thai resort island Phuket, one of its key destinations.

Its newly appointed chief executive Tony Davis says while Tiger aims to break even in its first year of operation, it will depend on the investment strategy the carrier is now formulating.

Mr Davis said, "I think the whole business model has been reviewed on not only the tsunami, but also the increasing fuel price, and also the availability of traffic rights.

"We're really taking a fresh approach. My appointment has given us a chance to re-evaluate the business model, to see what opportunities there are and really to gauge what level of investment is appropriate at this early stage in Tiger's developments."

The airline plans to maintain its daily flights to Phuket, even though only a quarter of seats are filled.

Currently, Tiger only flies to Bangkok, Phuket and Hat Yai in Thailand.

But it has secured air traffic rights to Jakarta, Medan and Padang in Indonesia.

And it is also eyeing the Malaysian market, the home turf of its rival Air Asia.

Tiger is expected to announce flights to other Asian cities as early as next week.

Mr Davis maintains that Tiger has the resources to win in the battle of low cost carriers, and won't hesitate to compete on price.

He said, "I think there's going to be lots of price wars. Price is the single most important decision making factor when people buy an air-ticket...Consistent low fares on a regular basis, I think that will set us apart from our competition."

For a start, the carrier says it will unveil lower fares to Phuket in the next few days.

This is to encourage more to fly to the Thai resort, in the aftermath of the tsunami. - CNA

Copyright © 2004 MCN International Pte Ltd

The low cost terminal is not too bad, but might need some areas that should be reconsidered.

Jan 18, 2005
Tiger Airways aims to be next Singapore icon
Malaysia and Indonesia will be its core markets, CEO reveals

By Karamjit Kaur
Transport Correspondent

BUDGET airline Tiger Airways, which now flies only to Thailand, says it will focus on Malaysia and Indonesia as its core markets.

The Singapore Airlines-backed carrier already has the green light from the authorities here to fly to Jakarta, Padang and Medan.

Its new chief executive officer, Mr Tony Davis, did not say when the airline will start flying to these Indonesian destinations when he announced the news yesterday, but he did explain his company's new focus.

'We want to offer a comprehensive route network, but the core is really the short sector, as it enables us to get very high utilisation of the aircraft,' he said.

'Every time we take off, we get 180 seats to sell, so the more times we take off, the more seats we can sell.'

Using the carrier's fleet efficiently helps it to keep its costs and fares down, without having to resort to one-off 'promotions', he added.

The 39-year-old, who has done stints in Gulf Air and British Airways, as well as helped set up low-cost British carrier bmibaby in 2002, said research has shown that airline passengers look at price before things like punctuality and extra services.

He admitted that the lack of liberal skies in Asia will be a challenge when it comes to services, especially when it comes to expanding in Malaysia, but expects the situation to change eventually.

The bachelor with 18 years of aviation experience took over from Mr Patrick Gan as Tiger Airways' boss on Jan 1. Yesterday's media conference was his first.

Although he is new to Asia, he stuck his neck out by predicting that most of Asia-Pacific's airlines would fail. Tiger Airways though, he added, could emulate the success of Europe's Ryanair and America's Southwest Airlines.

'We have the shareholder commitment, the management expertise and we have every opportunity. We just have to make sure that we do better than anyone else,' he explained.

Apart from SIA, the other partners in the carrier are Singapore investment company Temasek Holdings, the founders of Irish low-cost airline Ryanair and United States-based marketing and business strategy consultants Indigo Partners.

Mr Davis opened the press conference by unveiling four 'dishes' on a tray - a figurine of Sir Stamford Raffles, several orchids, a plate of chilli crab and a model Tiger Airways plane.

The message: Tiger Airways will be the next Singapore icon.

Before the press conference, he told The Straits Times that he was 'invited' to apply for the position of chief executive officer by a head-hunting firm, and that he had 'jumped at the opportunity'.

'I'd already set up a low-cost airline in Britain and, clearly, the markets in Europe and in North America are very well established for such carriers.

'Here in Asia, it's still a very new market and new opportunity, and that was really one of the attractions for me.'

On the mystery that surrounds the circumstances under which Mr Gan left the airline, he said: 'I can only look forward. What's happened in the past has happened and, clearly, Patrick can speak for himself on issues that affect him.

'My focus coming into Tiger Airways is the next phase of development.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Business Times - 18 Jan 2005

Tiger Airways CEO sees competition crumbling

US, Europe experience shows that most LCCs would fail

By LIZA LIN

(SINGAPORE) Barely three weeks into his job, Tiger Airways CEO Tony Davis has already predicted the demise of most Asian low-cost carriers (LCCs).

In his first meeting with the media here, Mr Davis, 39, said that most Asian budget airlines would fail, but was confident that Tiger Airways would emerge the most successful.

'Not all low-cost airlines will succeed - of more than 50 LCCs in Europe, only two are really successful. If history is repeated here in Asia-Pacific, the majority of LCCs in Asia will fail,' said the 18-year-veteran of the airline industry.

There are currently nine LCCs operating in South-east Asia.

Previously, Mr Davis worked for British Midland Airways, Gulf Air and British Airways and was managing director of bmibaby, the British LCC he helped found in 2002.

Despite his gloomy forecast, the new CEO has big dreams for Tiger Airways.

'Singapore is already the home of the world's leading full service airline and the world's leading airport, now we want it to be the home of Asia's leading low-cost airline,' he said.

Most LCCs in North America and Europe failed to take off because of unclear product differentiation and the inability to expand their business quick enough to leverage on economies of scale, he said.

Tiger Airways, he said, would avoid a similar fate through a clear business proposition and strong shareholder support, adding: 'We can take advantage of our considerable shareholder expertise and resources to enable us to grow very quickly and establish a network of services across the region.'

Several of the airline's major shareholders are sizable players in the aviation industry, such as Singapore Airlines (49 per cent), former American West chairman Bill Franke's investment firm, Indigo Partners LLC (24 per cent), and Irelandia Investments (16 per cent).

Irelandia is the private investment arm of Ryanair founder Tony Ryan.

Mr Davis said that the airline's expectations of turning a profit after its first year took a knock with the Dec 26 tsunami disaster and spike in fuel costs. Passenger loads on flights to Phuket dropped to 25 per cent from 80 per cent before the disaster.

However, he is still optimistic about the carrier's chances of turning a profit.

He said that the airline's next focus will be to mount flights to neighbouring countries such as Malaysia and Indonesia.

He did not rule out flights to China and India in the future.

He said that the airline has received landing rights to Jakarta, Medan and Padang in Indonesia but has not determined when flights to these areas would start.

Unlike his previous airline, bmibaby, which Mr Davis described as being 'able to fly anywhere in the EU subject to getting a landing slot', Tiger Airways has a harder time as availability of air service rights in Asia were much more restrictive.

'The opportunities available are very limited, governments of other countries still need some convincing of the benefits.'

But he is certain of the growth potential of budget airlines in the industry, especially when the new budget terminal in Changi is completed.

Currently, the three Singapore-based budget carriers, Tiger Airways, Valuair and Jetstar Asia, make up about 7 per cent of Changi Airport's total flights.

He declined to speculate on the increase in budget airline flights in the future, saying that previous forecasts made in Europe had proved inaccurate because actual demand outstripped original forecasts.

He cited an example seven years ago, when industry experts predicted only 4-6 per cent of travellers would fly budget airlines. The actual number came to 20 per cent.

Adding that he is already seeing demand for low-cost tickets pick up, Mr Davis said: 'People are starting to create trips around the availability of low-cost tickets. Unlike before, when people would stay home and have one or two holidays a year, now people are just going away to do shopping.'

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Jan 19, 2005
Tiger Airways cutting fares to help Phuket recover

By Sandra Leong

PHUKET - LOW-COST carrier Tiger Airways is slashing prices to help put the roar back to Phuket's tsunami-battered tourism industry.

Working with the Tourism Authority Of Thailand, it is promising promotional fares lower than its existing one-way fare of $45.98.

Details will be revealed next week in a drive to encourage jittery tourists to return to the once popular beach town.

Latest figures from the Phuket Tourist Business Association show that occupancy at the approximately 560 hotels is at a low 20 per cent.

Most are open for business, but more than 30,000 rooms remain unoccupied at a time when it is the peak period for travel.

Singapore-based Tiger Airways has also not escaped the fallout of the Dec 26 tsunami.

'Immediately after the tsunami, we had a lot of cancellations, with passengers rerouting their flights to Bangkok and Hat Yai,' said spokesman Cheryl Ong.

The passenger load on the carrier's daily flight to Phuket is now only between 25 per cent and 50 per cent, a drop from 70 per cent before the disaster.

The company revealed its plans to slash prices during a media trip in Phuket yesterday.

Ms Ong also said that Tiger Airways, barring unforeseen changes, will continue to help bring passengers to fill hotels, restaurants and shops which provide much-needed jobs.

About 90 per cent of Phuket's income is generated from tourism, which provides jobs for many of its residents.

'Our friends have given us medicine, money and clothes,' said Mr Pattanapong Ekevanich, president of the Phuket Tourist Business Association.

'But what we need most are tourists.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

19 January 2005

Lack of 'open skies' in Asia helping premium airlines cope with budget carriers
By Chua Chin Chye, Channel NewsAsia

SINGAPORE : Some low cost carriers have been asking for an "open skies" environment in the region to facilitate their expansion.

But according to a study conducted by MasterCard International, "open skies" is not the only option forward.

MasterCard says budget carriers can still thrive without an "open skies" environment in Asia.

MasterCard says the lack of an "open skies" regime is preventing low cost carriers from tapping their true competitive potential.

But that actually helps to keep full-service carriers flying.

That is because having an "open skies" regime in Asia will allow budget carriers to penetrate all or most of the medium and short-haul routes, forcing all airlines into heavy price-cutting.

In such a situation, premium airlines are likely to be the hardest hit.

Yuwa Hedrick-Wong, Economic Advisor, MasterCard International, said, "My personal view is that (an) open skies arrangement will come with a lot of challenges to current players, especially to full-service carriers in the region.

"For the premium carriers, they will be motivated to really focus on customer and market segmentation a lot deeper, and concentrate on more innovative services and so on. "

MasterCard warns that premium carriers - which are unable to cut prices while maintaining or increasing their load factor - could face financial collapse.

Asia is the world's fastest growing air travel market, at 6.4 percent per year, compared to the global average of 4.8 percent.

And MasterCard says an open skies policy would knock up that growth rate by about a quarter.

Yuwa Hedrick-Wong said, "I think that the market size will be expanding at a rate such that it will be able to accommodate the current players, and allow the expansion of capacity and so on."

Industry players agree.

Sim Kay Wee, CEO, ValuAir, said, "I think that all of us, if we do our job well, which is to keep costs really low, and go after our business with the correct marketing strategy...we will succeed one way or the other. Some of us will succeed better than others."

MasterCard says that right now, low cost carriers have several factors in their favour.

Many Asian countries are expanding airport capacity, and helping to ease competition for landing rights and better flight times.

And for budget carriers seeking to expand, there are other options apart from an "open skies" regime.

They could try to leverage on bilateral air services agreements, or in the case of Air Asia, work around the problem by setting up hubs in regional cities. - CNA

Copyright © 2004 MCN International Pte Ltd

Business Times - 20 Jan 2005

Find niche areas, Asian budget carriers told

MasterCard study tells them to focus on China, India and shopper travellers

By ALEXANDRA HO

(SINGAPORE) Asian low-cost carriers (LCC) have to focus on niche areas in order to overcome constraints such as a lack of open skies agreement in the region, according to a study by MasterCard International.

The study reckoned that Asia Pacific's airline industry has the highest growth potential in the world, with predicted growth rates of 6.4 per cent a year, compared to the world average of 4.8 per cent.

But MasterCard's economic adviser Yuwa Hedrick-Wong said LCCs will find it tough to emulate the growth models of their Western counterparts, given the Asia Pacific's structure of bilateral air service agreements between governments. 'The present emergence of LCCs in the region is occurring within and limited by the context of point-to-point operations permitted by the existing bilateral agreement,' Dr Hedrick-Wong observed in the study.

Without the unfettered access to key cities that Western LCCs enjoy, Dr Hedrick-Wong suggested that Asian LCCs look to China, and to a lesser extent, India, as growth markets.

That is because about 70 per cent of China's estimated 780 routes are suitable for LCCs to operate.

On top of that, he said there is the sheer size of the market there - a huge number of potential travellers that is still untapped. The potential demand of the Chinese population to travel is present but the supply is just not there. But, this, he explained, is more out of structural problems, such as a lack of basic infrastructure like airports and tough domestic regulations.

If these factors are resolved, MasterCard's study said that LCCs could contribute up to 25 per cent of traffic volume growth in China by 2013. That is against the backdrop of predictions that the China domestic market will grow at over 8 per cent a year, accounting for more than 24 per cent of total Asia Pacific share by then.

The study also suggested that LCCs could tap into an emerging trend it called an 'Asian phenomenon' - shopper travellers.

This referred to people who are willing to hop on a flight to go to certain cities with the sole intention of shopping. For instance, Dr Hedrick-Wong said Japanese tourists would go to Korea for a weekend, or Singaporeans to Bangkok, just to shop.

'We are estimating that by 2011, shopper travellers' spending, not counting air tickets, but just shopping, is likely to be US$11 billion a year for four cities - Seoul, Hong Kong, Singapore and Bangkok, if LCCs can operate in those sectors.'

Dr Hedrick-Wong conceded that it might not be easy for LCCs to operate those routes but they present a potential for the budget carriers.

But he remains upbeat on the future of air travel in Asia Pacific. 'With or without open skies, the future of the airline industry in Asia Pacific is one of increasing competition, more dynamic changes, and more refined market segmentation and customer management.

'Unlike their European and US counterparts, the industry in Asia Pacific will see massive growth in traffic volume, thus increasing both the scope and scale of the market, creating better potential for the growth of a healthy and competitive industry,' he said.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Jan 21, 2005
Tiger Airways offers $10 ticket to Phuket
Low-cost carrier slashes fares to lure visitors to tsunami-hit island

By Karamjit Kaur
Transport Correspondent

BUDGET airline Tiger Airways has slashed its fare to Phuket by almost 80 per cent to entice travellers back to the tsunami-hit resort island.

From a one-way starting fare of $45.98, the Singapore Airlines-backed carrier is offering 20,000 seats at $9.98 each.

Bookings start today and close on Feb 6, said the airline in a statement yesterday.

Special room rates at participating hotels are also available online at www. tigerairways.com

Regional carrier SilkAir is also working with travel agents, hotels and tourism authorities to bring tourists back to Phuket, Krabi and Langkawi.

And travel agents say the response to its packages, which became available yesterday, has been good.

SA Tours' assistant general manager for business development, Ms Alicia Seah, told The Straits Times yesterday: 'We received about 50 calls in the morning alone for the promotions being offered to the three destinations and some have confirmed their bookings.'

One of SilkAir's deals is a $99 package for one person to stay three days in Phuket. This covers air fare, accommodation, breakfast and land transfers.

It has similar packages costing $128 for a four-day stay in Krabi or a three-day one in Langkawi. Travellers are put up in a three-star hotels. They can ask for an upgrade and pay the balance.

The rates exclude airport and other taxes, and they must travel before Feb 28.

Chan Brothers' spokesman claimed: 'Never before have there been such deals. Prices are at least 60 to 70 per cent less than what they were a year ago.'

Since the disaster hit on Dec 26, Thai tourism authorities have been working with different companies to bring back the tourist dollar.

It is obviously in the airlines' interests to pitch in.

Since the tsunami hit, Tiger Airways has managed to fill only 25 per cent of the seats on its flights to Phuket, said its chief executive officer, Mr Tony Davis.

Before that, up to 80 per cent of its seats were booked.

SilkAir, too, is having problems filling its flights to the Thai island, even though it recently cut their numbers from three flights a day to two a day. It has also halved the number of services to Krabi from four, to two a week.

SA Tours' Ms Seah expects more airlines to offer similar promotions with Chinese New Year looming. It falls on Feb 9 and 10.

She said: 'Such promotions will definitely help boost tourism, which is good for everyone in the industry. The disaster has created quite a bit of fear among travellers.'

She revealed that her tour agency is working with hotels and tourism authorities in Thailand on promotional packages for travellers, and said: 'We'll announce the details of our promotion soon.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Jan 24, 2005
Malaysian tycoon discussing stake in Valuair

KUALA LUMPUR - A Malaysian tycoon's airport management company is in talks with Singapore's Valuair over acquiring a stake in the budget airline, a news report said on Monday.

Malaysia's Senai Airport Terminal Services (Sats) has agreed to sign a preliminary non-binding agreement to explore the possibility of Sats providing fresh financing in return for equity in Valuair, the Malay Mail reported, citing unidentified sources.

Valuair is seeking as much as US$25 million(S$40.8 million) in fresh capital for expansion, which should help the carrier meet a self-imposed deadline to list on the Singapore Stock Exchange by 2006, the daily said.

Sats - controlled by one of Malaysia's top businessman, Syed Mokhtar Al Bukhary - operates the Senai Airport in Johor.

Sats officials weren't immediately available for comment.

Valuair currently operates flights to Bangkok, Hong Kong, the Indonesian capital of Jakarta, and Perth in Western Australia.

It was the first of three budget carriers to begin operations from Singapore last year. The others are Singapore Airlines-backed Tiger Airways and Jetstar Asia, which is majority-owned by Australia's Qantas Airways Ltd.

In December, Malaysia's Star Cruises acquired a 20 per cent stake in Valuair, making it the airline's largest shareholder.

The strategic alliance with the world's third-largest cruise operator is part of Valuair's continuing second round of financing aimed at helping the airliner eventually buy wide-body airplanes so that it can fly to more distant destinations.

Valuair raised about US$22.3 million in the first phase of financing before it started up around May 2004.

At the time, Valuair Chairman Lim Chin Beng, a former top executive at Singapore Airlines, said the airline was in talks with two other parties for capital-injection needs.

Online travel-booking company Asiatravel.com Holdings Ltd, which has pumped US$4 million so far into Valuair, currently owns 10.8 per cent of the airline. -- AP

Copyright © 2004 Singapore Press Holdings. All rights reserved.

24 January 2005

Jakarta-based AWAIR may cancel plans to fly to Singapore
By Connie Tan, Channel NewsAsia

SINGAPORE : Indonesian budget carrier AWAIR is warning that it may abandon its plans for flights between Jakarta and Singapore, if it does not get approval from the Civil Aviation Authority of Singapore soon.

AWAIR - the Indonesian arm of AirAsia - had to cancel its inaugural flight to Singapore last week because it did not get the go-ahead in time.

So far, some 1,800 travellers have been affected by the delay.

And the airline says it is ready to look at alternative routes.

AirAsia's CEO Tony Fernandas said: "We're a business. We came here because we were promised a lot but we just can't carry on waiting indefinitely for the approval. We have to move and we're getting impatient now. We will be deciding over the next few days and we have already started the process of applying for flights between Jakarta and KL."

The CAAS is still processing AWAIR's application. It is not clear when a decision will be reached. - CNA

Copyright © 2005 MCN International Pte Ltd

Business Times - 26 Jan 2005

AVIATION CONFERENCE
Asian full-service airlines more able to fight low-cost rivals: SIA chief

By VEN SREENIVASAN

(SINGAPORE) Asian full-service legacy carriers are more nimble and ready than their American and European counterparts to meet the competition head-on from low cost upstarts, said Singapore Airlines (SIA) chief executive Chew Choon Seng.

'It took Delta more than a decade to come up with revolutionary fares (in the face of low cost competition),' Mr Chew said. 'We won't be so moribund in our response and will move quickly to compete at the margins.'

Speaking at the Asia Pacific & Middle East Aviation and Tourism Outlook 2005 conference yesterday, Mr Chew said that any airline can call itself a low fare airline.

'But whether or not you can maintain costs low enough to sustain low fares is an open question.'

He added that it was a misnomer to equate all Asian low-cost carrier (LCC) players with their US and European counterparts as they did not enjoy the same access to secondary airports nor have the ability to operate in whatever sectors they wanted.

He also cast doubts on the survivability of some of the start-ups.

'If the evidence is anything to go by, I would hazard a guess that only a handful of them are making any profit, after taking into account deferred costs,' he said. 'At the end of the day, consumers will decide who survives.'

Nevertheless, he acknowledged that the arrival of the LCC phenomenon has revolutionised air travel in the region and whetted the appetite for regional air travel.

The low-cost airline phenomenon has been sweeping across the Asia-Pacific region in the last two years, with over a dozen players starting up in South-east Asia, India and China. SIA itself is into the game with its 49 per cent-owned Tiger Airways.

But that has not stopped SIA or its cohorts like Thai and Cathay Pacific from offering equally low fares - albeit on limited flights - to destinations served by the LCCs, thus raising howls of protest of 'predatory pricing' from the low-cost start-ups.

In his speech, Mr Chew also noted that while liberalisation was occurring gradually, full competition in the global aviation industry was at least three years away.

'Aviation is too important to be strangled by outdated regulation,' he said. 'Protecting vested interest will create a heavy cost to be borne by consumers and taxpayers.'

Turning to the Australia-US trans-Pacific route, which SIA is keen to participate in, Mr Chew said that this route was 'demonstrably underserved'.

'We are aware that it is very difficult to get seats on the sector at certain times of the year and the fares on this route are very rich compared to the comparable kangaroo route.'

He said opening the route to competition would bring more price competition and service options for travellers.

Singapore's Transport Minister Yeo Cheow Tong and his Australian counterpart John Anderson will hold another round of discussions on open skies, including SIA's access to the trans-Pacific route, next month. India's aviation sector to take off in big way, Pg 16

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 27 Jan 2005

Four Asian budget airlines plan IPOs to fuel growth

They seek to expand fleet and routes to meet travel demand

(SINGAPORE) Four of the 11 low-fare carriers that fly in South-east Asia and India said they are planning initial public offers of their stocks in the next two years, tapping funds to expand as the region's air travel grows.

India's Air Deccan plans to raise as much as US$300 million by September 2006, selling at least a quarter of its stock to buy planes and extend its routes overseas, said managing director G R Gopinath. Singapore's Valuair Ltd, Bangkok-based Orient Thai Airlines and Nok Air said they are also aiming to raise funds in the next two years by selling shares.

South-east Asia 'is going to be the region with the most growth in the world,' said Sarit Panjarnano, an analyst at KGI Securities (Thailand) in Bangkok. Greater easing of aviation policies 'will lead to more air traffic from India and China'.

The four airlines are following the Oct 29 stock sale by Malaysia's AirAsia, South-east Asia's biggest discount carrier, which raised MR863 million (S$371 million) to buy new planes.

With increasing affluence in the population of China and India, the demand for air travels has increased. Easier travelling rules in China and India are also letting more citizens fly abroad for business and leisure.

Orient Thai, which operates Thailand's largest discount carrier, plans to sell at least a quarter of its stock, the Bangkok-based airline's chairman Udom Tantiprasongchai said yesterday. Nok Air, owned by Thai Airways International, is considering an initial public offering in late 2006, chief executive Patee Sarasin said yesterday.

Valuair, one of three discount carriers based in Singapore, is also looking at an initial offer, said chief executive Sim Kay Wee, without giving a time.

AirAsia, the first low-cost carrier to fly in South-east Asia, offered the stock to individual investors at MR1.16 a share, with institutional investors paying RM1.25 apiece.

Asia's demand for air travel is expected to expand at least 10 per cent this year, according to a forecast by Sydney-based Centre for Asia-Pacific Aviation. Increasing number of Chinese and Indian travellers, from the world's two most populous nations, will lead the growth in demand, said the centre's managing director Peter Harbison.

'We'll see double-digit growth on a lot of Asia-Pacific routes this year, particularly those due to the influence of low-cost carriers coming through,' said Mr Harbison at Monday's Asia Pacific & Middle East Aviation and Travel Outlook conference held here.

At Singapore's Changi Airport, Asia's sixth-busiest, low-fare carriers flew 7 per cent of the 3,700 weekly flights. Besides Valuair, Singapore Airlines' Tiger Airways and Qantas Airways' JetStar Asia also base their flights at Changi.

Air Deccan, based in India's Bangalore city, plans to increase its fleet to 17 aircraft this year, with the capacity to expand its daily services to 100 flights.

Orient Thai, which began flying in December 2003 using the One-Two-Go brand, offers low-fare flights in Thailand and operates full-service flights to South Korea, Hong Kong, Singapore and Malaysia.

The Bangkok-based airline plans to more than double its fleet this year to expand domestic and international flights. The airline will lease 15 planes in 2005, three of them from Boeing, Mr Udom said. He said the remaining 12 will be 'medium-sized' planes.

'The company must accelerate the fleet expansion and other facilities to serve high demand,' said Mr Udom. 'We want to increase flights in Thailand and fly to China.'

Orient Thai is planning to set up a wholly owned budget airline in Hong Kong, Mr Udom said, without giving details. It will resume flying to Hong Kong from southern Thailand's Phuket on Feb 1. The service was halted after the Dec 26 tsunami destroyed tourism facilities on Phuket. - Bloomberg

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 27 Jan 2005

CEOs differ on strategy for low-cost airlines

Some see desire for comfort; others want consistently low fares

By VEN SREENIVASAN

(SINGAPORE) Should low-cost airline operators in Asia-Pacific starkly differentiate themselves from the incumbent network carriers? Or should they offer a hybrid service encompassing a combination of low fares and a certain minimal level of frills? And, is the over-emphasis on low cost, point-to-point, mass travel disenfranchising a silent group of travellers who want, and expect, a certain level of comfort and frills?

These were among the topics broached at yesterday's Second Annual Asia Pacific Low-Cost Airline Symposium.

Tony Davis, chief executive of Tiger Airways, and Udom Tantiprasongchai, Thai discount carrier One-Two-Go's chairman, differed on what strategy will best work for low-cost carriers in the region.

Mr Davis, who joined Tiger this year after stints at Britain's BMIbaby and British Airways, insisted that regional low-cost carriers have to be radically different from their legacy counterparts.

'Conditions in Asia are very different from those in Europe,' he said. 'Here they have to compete with full-service players who can match their prices and product. In short, you compete even against the B747-400s. So you got to have a stark differentiation in the product. Mid-frills just won't work. You have to offer consistently low fares, while operating at the lowest cost.'

But Mr Tantiprasongchai disagreed, arguing that the ideal model for Asia was low fares, some basic conveniences, including simple food and drinks.

'Most (Asian) passengers are willing to pay something for convenience,' he said. 'No traveller wants to be deceived by unrealistic advertised fares.'

He suggested that operating cost structure in this region allowed low-cost carriers to offer fares which were a third below their legacy counterparts, while still providing a certain level of service on-board.

Meanwhile, William Franke, managing partner of aviation investment company Indigo Partners and Tiger Airways' chairman (in which Indigo has a 24 per cent stake), suggested that the huge emphasis on low-cost air travel had 'disenfranchised' a silent group of travellers who wanted comfort and convenience.

'While many talk low-cost model, they won't travel the low-cost model,' he said in his keynote address earlier. 'These 'frill seekers' are aplenty, looking for comfort and convenience.'

He pointed out that this desire for comfort, convenience, speed and flexibility was fuelling demand for private executive jets, air taxis and even all-business class travel among business travellers.

'With the right business model, there could be success in the all-business class model,' he said, noting that demand for private jets would hit 10,000 during this decade.

He added that although there were opportunities for investment in the low-cost carrier business in Africa, the Middle East and the Asia Pacific, it was not for the faint hearted.

'Low fare has introduced flying to the masses for the first time,' he said. 'But imperfect legal systems, language problems and arcane regulations pose serious challenges for investors.'

Besides the emergence of low-cost services in new markets and the prospect of all-business class travel, Mr Franke also sees a potential for the emergence of long-haul low-cost travel.

'Low-cost model will be pervasive in the region, but the opportunity to invest profitability in them is over,' he said. 'Some of the best opportunity may be in legacy carrier model, but with a cost structure which is consistent with that of low-cost carriers.'

But for investors who wanted to make money in aviation, they would have to identify the 'next, next' thing, after the LCC phenomenon, he said.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 27 Jan 2005

Low-cost carriers to fill Asian skies if curbs go: analyst
(SINGAPORE) Asia's growing numbers of budget airlines could service hundreds of big cities that currently have no international air links if governments ease restrictions, a leading aviation analyst said yesterday.

The Centre for Asia Pacific Aviation's managing director Peter Harbison told a seminar on low-cost airlines there were 130 cities in Asia with populations of more than one million people and a further 105 cities with more than 500,000.

He said the 'vast majority' of these cities were not serviced by international airlines.

'The potential for route expansion, as economic development pushes millions more people through the travel threshold, is vast,' he said. He cited China, Japan, India and South-east Asia all as areas with enormous budget airline potential. Low-cost airlines were already taking up 16 per cent of the 916 current orders for aircraft in the Asia Pacific region.

However, he said governments in the region must liberalise the aviation industry if budget airlines were to reach their potential.

'The rate of liberalisation will decide the speed and success rate of low-cost carriers. They have a big future but there are certainly some road bumps ahead,' he said.

Mr Harbison outlined air service agreements, aircraft ownership and control, and entry rules as areas subject to restrictions and inhibiting budget carriers.

Regional airports have a role to play as well, such as adapting their operations to accommodate dedicated low-cost terminals, he added. - AFP

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Jan 27, 2005
Tiger Airways seeks solutions to restrictive pacts

By Goh Chin Lian

SINGAPORE-BASED low-cost carrier Tiger Airways is looking at how its Malaysian rival, AirAsia, got around restrictive bilateral agreements by forming joint ventures in other countries.

Such a strategy looks set to be key to Tiger Airways growing beyond Singapore's borders, said the airline's president and chief executive, Mr Tony Davis.

He said neighbouring Indonesia and Malaysia have 'very restricted agreements with Singapore, unfortunately', and that all the routes the airline wants to fly depend on Singapore having air services agreements with other countries.

'Clearly, until we have a single open-skies agreement in Asia, we are constantly having to make sure that not only is there an air services agreement, but also that we get chosen out of the five airlines to be given those rights,' Mr Davis said.

He was speaking yesterday on the sidelines of a low-cost airlines symposium at Suntec Convention Centre organised by Sydney-based Centre for Asia Pacific Aviation.

The other airlines based here competing for air rights are Singapore Airlines, SilkAir, Valuair and Jetstar Asia.

Mr Davis said: 'If we can get access to other markets, we wouldn't be wholly reliant on those air services agreements.'

He would not say which markets his airline is eyeing for such a joint venture, except that it is doing research and looking to the AirAsia model of 'creative solutions'.

AirAsia tied up with Thai media and telecoms group Shin Corp in 2003 to form low-cost airline Thai AirAsia, and took a 49 per cent stake last year in debt-ridden Indonesian airline, Awair, now also a low-cost airline.

Airline industry players say how quickly governments open up their skies will determine how fast Asia's low-cost airline market can grow.

But Tiger Airways chairman William Franke believes the next big thing in the airline business is not no-frills airlines, but traditional airlines with a twist.

He said the next generation of airlines will look like the legacy carriers that offer multiple classes of travel as well as full on-board service from meals to entertainment, but have a low-cost structure much like budget airlines.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Business Times - 28 Jan 2005

Asian LCCs should develop 'hybrid model' with basic frills

By VEN SREENIVASAN

(SINGAPORE) The European low-cost carrier model may not be as successful in Asia where there are significant regulatory restrictions and travellers expect some basic level of service. Instead, Asian low-cost carriers should develop a 'hybrid model' where they maintain a low-cost operating base, but are also able to provide some basic 'frills', said Valuair chief executive Sim Kay Wee.

Speaking at the Low-Cost Airline Symposium yesterday, Mr Sim pointed out peculiarities of the Asian market which low-cost operators had to take into consideration. These include longer point-to-point distances, under-serviced secondary airports and an operating environment where the interest of national carriers were closely aligned to national interests.

In addition, regional full service carriers enjoy more low-cost structures than their European counterparts. Under such circumstances, a strategy of 'lower fares', rather than 'the lowest fares', was more likely to yield the requisite results.

'Recognising that a number of aviation authorities are wary of a price war, a low-cost carrier operating in the Asia Pacific can sell lower air fares without disrupting the market, and still make a reasonable return,' he said. 'With the expected traffic growth, low-cost airlines can aim for load factors in the 80 per cent range, making it a viable proposition.' He said a hybrid model which was a convergence between that of the full service carrier and the low-cost carrier was the answer. 'Some countries prefer economic stability and slower transition than the turmoil that comes with open skies,' he noted.

Unlike low-cost carriers like Tiger Airways and Air Asia, Valuair provides certain 'frills' like hot meals and drinks, 20-kg baggage allowance and assigned seating on its Airbus A320 planes. Valuair's strategy is to fix its fares at a 20 to 30 per cent discount against full service carriers on similar routes, instead of offering a 'graduated' fare scale preferred by its low-cost counterparts.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 28 Jan 2005

Jetstar Asia plans flights to Indonesia in Feb

(SINGAPORE) Jetstar Asia, the international budget carrier of Qantas Airways, said it plans to fly to Jakarta and Surabaya in Indonesia next month as it expands its network to meet the rising travel demand in Asia.

Con Korfiatis, Jetstar Asia's chief operating officer, said the airline is also interested to fly to Malaysia and expects to serve Manila and Shanghai soon after starting its Indonesian flights.

'I expect our services to Indonesia to be the next cap off the rank and we hope to have that up and running next month,' Mr Korfiatis said yesterday in an interview at a low-cost airline conference here.

Budget carriers like Jetstar Asia, Singapore Airlines' Tiger Airways and Valuair are expanding fleets and routes in South-east Asia, a region with a combined population of 500 million people. Passenger traffic in the region is forecast to grow an average 6.1 per cent each year until 2023, compared with a global average of 5.2 per cent, according to Boeing Co.

Jetstar Asia, which started offering flights to Hong Kong, Taipei and Pattaya in December last year, plans to add more services to Indonesia and the Philippines and expand its network to Vietnam and other Indochina countries, Mr Korfiatis said. 'We just see enormous growth opportunities that are out there,' he said. 'The only limiting factor is going to be the speed of deregulation in the market.'

The airline, which expects to make a profit in one to two years, will soon take delivery of its fourth leased Airbus SAS A320s. It will have another four by year-end. - Bloomberg

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

28 January 2005

Star Cruises to expand fleet, banks on fly-cruise packages
By Frederick Lim, Channel NewsAsia

SINGAPORE : Star Cruises is seeing a strong potential for growth in the regional cruise industry.

It is looking to add another three ships to its fleet over the next few years to cope with growing demand.

The company is seeking to position itself not just as a cruise operator alone, but also as a fly-cruise specialist.

Last month Star Cruises took a strategic 20 percent stake in Valuair and it will launch its first fly-cruise deals with the budget carrier from March onwards.

The company is also hopeful that it will benefit from Singapore's initiatives to double tourist arrivals by 2015.

Over the last five years, Star Cruises has seen its passenger loads climb by an annual compounded rate of 16 percent.

On average it brought in 130,000 passengers per year from as far as Japan, China, Australia and India to sail on its cruise ships.

And it expects demand to rise even more strongly as it sees Singapore as having tremendous potential to become a cruise hub for the region.

Said Chong Chee Tut, Star Cruises chief operating officer, "Singapore has got several advantages. It is not just in terms of climate -- an area where you can cruise year round, very much like Miami. Of course in some other countries, especially during winter, it gets cold, the sea gets rough, they are not suitable to be a year round cruise hub. Singapore is ideally suited for that. Traditionally Singapore is also a major air hub and that's important if you want to develop the inbound fly-cruise market."

And it is in the fly-cruise market that Star Cruises is charting its future growth plans.

With its newly-formed partnership with Valuair it sees itself as being well-positioned to capture a large slice of the market.

Mr Chong said, "The people who want to come and cruise out of Singapore, it offers them a slightly cheaper alternative, to fly a cheaper airline into Singapore. And from our perspective it also provides a more seamless air-sea packaging for people. All they need to do is call one call centre and they can book the air component, the hotel component, and cruise component."

Star Cruises says it will be adding one ship this year, to be followed by another in 2007 and one more the following year.

As for earlier media reports that it was planning an integrated cruise centre and casino resort in Singapore, Star Cruises says it is still evaluating its options and has yet to make a final decision. - CNA

Copyright © 2005 MCN International Pte Ltd

Jan 29, 2005
4,000 tickets to Phuket sold
Tiger Airways aims to sell all 20,000 tickets at $9.98 before bookings close on Feb 6

By Kok Tse Wei

BARGAIN-CHASING travellers have bought 4,000 air tickets to Phuket at $9.98 each.

The promotion by Singapore-based low-cost carrier Tiger Airways started on Jan 21.

It hopes to sell all 20,000 tickets on offer when bookings end on Feb 6, says spokesman Ronald Wong.

He is happy with the 20 per cent take-up rate so far, adding: 'We're not worried as a lot of people tend to buy near the end of the promotion period.'

But he says all 720 tickets available for the Chinese New Year and Good Friday holiday periods are sold out.

Return tickets to Singapore from Phuket are also at $9.98 during the promotion. Passengers must travel by end-April.

The airline is working with the Tourism Authority of Thailand (TAT) to bring visitors back to the resort island, which was hit by the Dec 26 tsunami.

Occupancy rates at hotels there have reportedly fallen to 10 per cent.

The rates have since picked up with the introduction of promotions but exact figures were not available from TAT at press time.

Earlier reports also said that Tiger's planes were only 25 per cent filled in the aftermath of the tsunami.

More than 30 hotels and resorts are also offering special rates for Tiger passengers. Rooms at the Deevana Patong Spa & Resort, for instance, start from about 900 baht (S$38) a night, including breakfast. This is half the normal price, says a TAT spokesman.

The lower costs have drawn travellers like Ms Lisa Pang, 36, who flies frequently to Phuket.

'I think it's quite safe now. They need tourists anyway,' says the administrator. She will fly out on March 12 during the one-week school break for four days with her family of four.

Mr Chang Chia Sheng, 34, a Taiwanese manager based in Singapore, is taking his wife and daughter for a four-day vacation on Feb 7.

But they will be playing it safe there.

'We've chosen a hotel that's quite far away from the beach. We'll try not to do sea activities but go for theatre shows and enjoy the spa,' he says.

Besides the Tiger promotion, another airline, SilkAir, is also selling discounted tour packages to Krabi, Langkawi and Phuket.

The Krabi and Langkawi packages cost $128 each, while the Phuket one is $99. The packages include airfare, hotel accommodation, breakfast and airport transfer. Bookings close on Feb 5.

A SilkAir spokesman says the most popular package is the one to Phuket.

'We expect to sell more than 2,000 such packages to all three locations for travel in late January and February,' she says, adding that the packages are sold out for many dates, including the Chinese New Year holidays.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Business Times - 29 Jan 2005

Plans for Tiger Airways to fly to Subang?

(KUALA LUMPUR) The radical idea of Singapore's budget airline Tiger Airways flying into Subang airport and leasing aircraft from Penerbangan Malaysia Bhd (PMB), and PMB eventually ending up with a stake in Tiger, are possibilities that The Star broached in a front-page story yesterday.

Talk of developments in Malaysia's aviation industry was rife and this made many research analysts excited.

Tiger Airways, via its spokesperson, told StarBiz, 'Tiger Airways is always on the lookout for opportunities to expand our network in South-east Asia, but we cannot confirm any particular organisation that we are speaking to.' Tiger currently operates four A330 aircraft for its routes from Singapore to Thailand and is keen to fly into Malaysia, its officials had said last year.

PMB, Malaysia's only aircraft leasing company, wants to lease aircraft to more customers than its sole customer, Malaysia Airlines (MAS). PMB has 84 aircraft that are currently leased to MAS.

PMB, when approached for comments, had this to say: 'We are considering some leasing opportunities and there are several parties that have indicated their interest in leasing our aircraft. But at this juncture, there has been no approach made by Tiger Airways to lease aircraft from us,' PMB spokesperson Shahril Mokhtar told StarBiz.

All this talk stems from a preliminary proposal that was put forth to the authorities several months ago, but whether the idea was taken up is unclear.

The entry of Tiger Airways would be good for the air travel industry but there are several considerations such as getting the landing rights, the decision on whether to re-open Subang airport and the impact of such a scenario to existing low-cost carrier AirAsia and MAS, which now operates the domestic operations on behalf of PMB.

The question is whether PMB can take up a stake in Tiger Airways and set up a joint venture. That has to get the blessings of the authorities.

PMB's parent, Khazanah Nasional Bhd, declined to comment on the equity issue.

Another issue is also whether such a move would get the blessings of both the Malaysian and Singaporean governments since PMB is Malaysian-owned and Tiger Airways is 49 per cent owned by Singapore Airlines with another 11 per cent held by Temasek Holdings, the Singapore investment agency.

This may well be another interesting piece of talk but the possibility of it happening should not be discounted since PMB wants to open up and Tiger Airways is a growing low-cost carrier.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Low Cost Carriers (LCC's)

After years of defying trends in the US and Europe, the Asia/Pacific region has climbed aboard the budget airline revolution train.

People may not be out in the streets demonstrating for change, but they are at their home PCs and Internet cafes making bookings for seats on a revolution sweeping across Asia. The era of the low-cost carrier has arrived and perhaps sooner than most would have expected in a region still making the transition from tightly drawn bilateral agreements to freewheeling open skies arrangements. Interestingly, the momentum in Asia is driven not by liberalization per se but by the support of government investment agencies and major airports that regard LCCs as weapons in the ongoing battle for hub domination and the economic benefits of tourism. This means that LCCs can thrive despite the absence of open skies. Peter Harbison, founder and MD of the Centre for Asia Pacific Aviation, asserts that LCCs are “provoking very different government attitudes to airline access, domestically and internationally. As popular demand for new, low-priced air travel spreads—like wildfire—governments are quickly acting to remove restrictions on new airline entry. So this movement is not just about low-cost airlines; it is about the smashing of barriers to competition, domestically and internationally.” Leading the charge is the Singapore government investment arm Temasek Holdings, which owns Changi Airport and a controlling stake in Singapore Airlines. It also has a significant stake in that carrier’s LCC venture due to start later this year, Tiger Airways, and perhaps to hedge its bets a 19% share of Qantas’s Jetstar Asia, also to be based at Changi. To the Singapore government and Temasek, LCCs are a critical part of a “numbers game”—hub domination. Altogether Changi and the aviation industry contribute S$13.3 billion—9.2%—of Singapore’s GDP, Temasek has made it clear to SIA unions that between preserving its assets in SIA and protecting Changi’s hub status, the latter has priority. And it is not just competition among hubs in Singapore, Malaysia, Thailand and Hong Kong. The battle also stretches to Dubai, where the government is focused on boosting tourism as a way to offset dwindling oil revenues. Tourism rose 30% in 2002. On the drawing board are a host of hotels and developments such as Dubailand, a $4.9 billion, 2-billion-sq.-ft. tourism city comprising six different entertainment worlds. Another project, Mall of the Emirates, will be the world’s largest mall outside the US. While Dubai has seen tourism soar, Singapore has experienced a steady decline. Between 1993 and 2002, its tourism receipts dropped 21% and the sector’s contribution to GDP plunged from 6% to just 3%. This fall has occurred against a backdrop of increasing tourism in the region, with Thailand, Malaysia and China emerging as the big winners. In Hong Kong, the $3 billion Disneyland theme park is scheduled to open by the end of 2005 and some see Macau becoming the Las Vegas of Asia. Another dynamic in the battle for traffic rights is last year’s agreement among ASEAN countries on what is dubbed the “Roadmap for ASEAN Competitive Air Services Policy” that will see limited open skies between all members by 2015 with a lifting of current restrictions between capital cities by 2008. With the exception of Brunei, ASEAN member countries Indonesia, Singapore, Malaysia, Philippines and Thailand all are home to a number of LCCs.

Certainly the catalyst of the low-cost revolution in Asia has been Kuala Lumpur-based AirAsia, which expects to carry 4 million passengers this year—double the 2003 number—and will have 24 aircraft in service by year end, up from 17 today. On the drawing board is an order for up to 80 new jets over the next 4-8 years. “It is a good time to look at buying aircraft now and to be a dominant lowfare airline in Asia,” says CEO Tony Fernandes. He is chasing access to Changi and is looking at a series of joint-venture options with Singaporean interests including Temasek. In the meantime, Singaporeans are flocking to Johor Senai International Airport at the southern tip of Malaysia and 40% of AirAsia’s passengers out of that airport are Singaporeans. The airline also has had tremendous success in Thailand, setting up Thai Air- Asia with the local Shin Corp, which is controlled by the family of Prime Minister Thaksin Shinawatra. The new entrant will have a fleet of eight 737-300s by year end and carry more than a million passengers given current loads. Not surprisingly, the Thai government moved swiftly to accommodate AirAsia’s move into the market by increasing the foreign ownership cap from 30% to 49%. As well as domestic services, the LCC operates to Singapore, Vietnam, Macau, Malaysia and Myanmar. AirAsia and Thai AirAsia have limited their international expansion as they have “understood the Indonesian and Thai markets,” Fernandes says. AirAsia’s runaway success has been a conundrum for the Malay government. It is committed to both enabling low fares for the public to meet social agendas and assisting government-owned Malaysia Airlines, while also striving to build Kuala Lumpur as an economic and transportation hub. MAS because of its culture and high staff costs struggles to deliver low fares, and pressure is mounting in the press for its domestic routes to be handed over to AirAsia.

The government, keen not to miss out on the benefits of the LCC revolution, is doing a back-flip and looking to turn the old Sultan Abd Aziz Shah Airport in Subang into an LCC facility. Only two years ago it ordered all airlines including AirAsia to move to the newer Kuala Lumpur International Airport, but now the taxi ride to the showcase glass-andgranite terminal costs more than many of AirAsia’s fares. Fernandes lauds such a move, predicting that “By having two airports it will help turn Kuala Lumpur into a travel base and make the city more attractive than Singapore.”

No doubt that possibility is at least partly behind SIA’s decision to take a 49% stake in Tiger Airways, which promises fares 50% lower than current levels. Temasek holds 11%; Irelandia, the investment vehicle of Ryanair founder Tony Ryan, holds 16%, and Texas financier and airline industry veteran David Bonderman, who is also Ryanair’s chairman, has 24% together with former America West Chairman William Franke through investment group Indigo Partners. Franke is chairman of the new venture, which hopes to take off before year end.

Already flying out of Changi with a pair of A320s is ValuAir. The brainchild of former SIA Vice Chairman Lim Chin Beng, the startup typifies the face of the niche LCC. Lim is adamant that his airline easily can survive the host of competitors lining up on Singapore’s runways. ValuAir offers a JetBlue style of product for sectors that are typically 4-5 hr. Lim isn’t too fussy about 20-min. turnarounds and reasons that with a 40- min. turn, “we can load cargo.” Longer turnarounds also allow interlining of passengers. ValuAir is flying to Hong Kong, Bangkok and Jakarta and has Guangzhou, Shanghai, Hyderabad and Madras on its radar.

Jetstar Asia brings together experience and government muscle, with Singapore businessmen holding 22%, Qantas 49% and Temesek the remainder. Qantas CEO Geoff Dixon says the advantages are twofold: “It is a stake in potentially the world’s largest travel market with up to 3 billion people—the overwhelming majority of whom have never flown—and the ability to build traffic into its largest hub.” The carrier launched domestic LCC Jetstar in May with 14 717s and 20 A320s are being delivered from June.

Australia’s Virgin Blue and part-owner Richard Branson also are on the prowl for associates in Asia and have held talks with AirAsia and other potential partners, but no deal has been inked yet. With the region clearly having a love affair with LCCs, the big question is whether China will climb onboard. In January, CAAC Director Yang Yuanyuan said the country was considering opening up the market for LCCs and that private investment would be encouraged. “If China decides to liberalize, the floodgates will open,” states Harbison. Established government-controlled Chinese airlines are looking closely at the LCC experience in Asia and the first privately owned Chinese LCCs are emerging. Approvals were given recently to Shanghai-based Spring and Autumn Airlines and Tianjin-based Aokai. The okays follow preliminary permission granted in February for China’s first private airline, Yinglian (Eagle United)—a major step in breaking the government’s monopoly on passenger air transport. Preliminary plans for Yinglian call for up to five 737-size jets operating from Chengdu with tickets 20% below current market rates. Spring and Autumn Airlines, backed by 23-yearold travel agency Spring International, plans to fly tourist charters as well as lowcost short flights out of Shanghai’s Hongqiao domestic airport, while Aokai plans charter passenger flights. The move to private LCCs is a significant change in direction for China after the government forced the consolidation of all government-run airlines into three groups to stem losses caused by fare wars, overcapacity and structural inefficiencies. China watchers suggest it will be some years before the aviation market is totally liberalized.

India is another massive market yet to be tapped by LCCs. Harbison observes: “The initial response from many in the industry is that ‘it can’t happen here.’ India is different. Six months ago that is exactly what they were saying about Southeast Asia. Three months ago they were saying it in North Asia. It is astonishing how fast people change their minds. In June alone we have had announcements about Air-India Express, Alliance Air and now Kingfisher, not to mention the interest in Air Deccan’s fundraising process.” Not everyone is convinced about the strength of the LCC revolution. Richard Stirland, outgoing DG of the Assn. of Asia Pacific Airlines, says that members such as Cathay Pacific have lower cost structures than their US or European counterparts. He sees the extensive use of widebody aircraft plus belly cargo as enabling those carriers to offer heavily discounted tickets on major routes, obviating the need for LCCs.

However, the reality in Asia is that airlines like AirAsia are soaring on new point-to-point regional routes that rarely have seen an aircraft, let alone a 747, and carrying people who have known air travel only as a vapor trail high above a rice paddy. “Now you are going to see squadrons of 737s and A320s in the skies,” quips Fernandes.

© Copyright Air Transport World

Business Times - 01 Feb 2005

Tiger Air unveils new low Thai fares

By VEN SREENIVASAN

(SINGAPORE) The low-fare battle looks set to get bloodier with Tiger Airways yesterday announcing one-way fares of $9.98 to Phuket, and $19.98 to either Bangkok or Hatyai.

'Traveling at low fares to three of Thailand's most vibrant destinations with Tiger Airways will be a fantastic way for Singaporeans to spend their holidays,' said Tony Davis, chief executive officer of Tiger Airways in a statement. 'The low fares give holiday and business travelers more options on how they want to spend their money instead of setting aside a huge part of their budgets just for getting to their destinations.' The latest fare offerings are for bookings made between Feb 1 and Feb 7, for travel during the period March 1 to April 30. This comes barely two weeks after Tiger added a fourth daily Singapore-Bangkok flight and announced 45,000 low-cost seats every month to Bangkok, with one-way fares starting at $49.98.

Mr Davis insists that Tiger Airways must, and will, offer the lowest fares possible. 'Conditions in Asia are very different from those in Europe,' he said last week at an aviation symposium. 'Here, they have to compete with full-service players who can match their prices and product. You compete even against the B747-400s. So you got to have a stark differentiation in the product. Mid-frills just won't work. You have to offer consistently low fares, while operating at the lowest cost.'

Last week, the Singapore Airlines associate announced that it was preparing to fly to Ho Chi Minh City, which would become its fourth destination.

Tiger Airways currently operates four new Airbus A320 aircraft.

But its fares are likely to be matched soon by competitors, especially Jetstar Asia and Thai AirAsia.

Earlier this month, Jetstar Asia tied up with credit card operator Visa to offer more seats at lower prices for cardholders. Until Feb 2, the Qantas associate offered one-way airfares from Singapore to Taipei, Hong Kong and Pattaya at $99, $70 and $40 respectively. BT understands the packages could be renewed soon.

And just 10 days ago, AirAsia unleashed its latest round of promotions with a whopping offer of 50,000 free seats out of its Kuala Lumpur and Senai hubs to destinations in Malaysia and Thailand. The budget carrier is preparing to unveil new lower fares on its Singapore-Phuket and Singapore-Bangkok routes.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

01 February 2005

Penerbangan Malaysia denies joint venture talks with Tiger Airways
By Thomas Cho, Channel NewsAsia

SINGAPORE : Penerbangan Malaysia (PMB) has denied that it is in any joint venture talks with Singapore budget carrier Tiger Airways.

The Malaysian company, which leases aircraft to Malaysian Airline System, insists it is not negotiating to lease planes to the Singapore carrier.

PMB is owned by Malaysia's Khazanah Nasional Bhd, the Finance Ministry's investment company.

Tiger Airways, which is 49 percent-owned by Singapore Airlines, had earlier announced plans to fly to Malaysia.

Malaysian newspaper reports have been speculating about a PMB-Tiger Airways tie-up.

A PMB-Tiger Airways alliance would mean tougher competition for Malaysian-based AirAsia.

Malaysian destinations are the core of AirAsia's operations. - CNA

Copyright © 2005 MCN International Pte Ltd

Business Times - 03 Feb 2005

More S'pore airlines to fly to Vietnam soon?

S'pore panel said to be considering applications from budget carriers

By VEN SREENIVASAN

(SINGAPORE) More Singapore- based airlines, other than Singapore Airlines, may soon be able to fly to the major cities of Vietnam.

Singa-pore's Air Traffic Rights Committee (ATRC) is meeting today to discuss the allocation of additional air traffic rights to Vietnam gained under the latest air services agreement (ASA) between the two countries, which was signed late last year. Under the agreement, flag carriers from both countries were allocated additional rights.

Currently, only Singapore Airlines (SIA) flies to Vietnam, operating six flights a week to Hanoi and 12 flights a week to Ho Chih Minh City.

Besides considering additional rights for SIA, the ATRC will also be considering applications from Singapore-based budget carriers Tiger Airways, Jetstar Asia and Valuair, sources told BT yesterday. Tiger recently announced it had already set up office in Hanoi, while Valuair and Jetstar told BT they had submitted applications to fly to Ho Chi Minh City and Hanoi.

'We are looking forward to operating to both Hanoi and Ho Chih Min City,' said JetStar's chief operating officer Con Korfiatis yesterday. 'Vietnam is a good market and we see strong travel demand to that destination.'

ASAs, which govern international airline operations, are negotiated bilaterally between governments. Singapore currently has ASA with over 90 countries.

Up to a year ago, Singapore's bank of air traffic rights had been used only by the SIA Group. But with the entry of new Singapore-registered budget carriers, the ATRC was established in late 2003 to allocate air traffic rights in a manner that 'maximises both the interests of Singapore as a nation as well as the benefits to the public'.

The seven-member committee is headed by the Permanent Secretary of the Ministry of Transport, and includes senior representatives from various government agencies like the Singapore Tourism Board, Economic Development Board, International Enterprise Singapore, Attorney-General's Chambers and the Civil Aviation Authority of Singapore.

Vietnam is seen as an attractive destination by Singapore carriers as it is a relatively new and undiscovered tourist market. But Singapore and Vietnam also enjoy longstanding economic ties and booming bilateral trade. Not surprisingly, both Vietnam Airlines and SIA have been enjoying extremely strong loads on their flights between the two countries.

The ASA inked last year provided for a gradual increase in flights between the two countries by their respective carriers over the next few years. It does not affect the existing rights enjoyed by SIA. But while Singapore subscribes to a free-skies principle, Vietnam has been cautious about throwing open its skies as it grew its flag carrier.

There is also the issue of constraints on airport infrastructure, with Ho Chi Minh City airport, in particular, already operating at maximum capacity.

To apply for available traffic rights, an airline has to first obtain a valid Air Operators Certificate certifying its ability to conduct safe aircraft operations for public transportation. The airline must also satisfy the necessary conditions under the relevant ASA and have sufficient financial resources to operate the proposed air services.

All new rights granted by the ATRC will have a validity period of up to five years. But in recognition of the role that the SIA has played in building Singapore into an aviation hub, the SIA Group retains its existing air traffic rights under a 10-year licence.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

I can imagine Vietnam as being of growth potential for the budget aviation market

03 February 2005

Budget carrier Tiger Airways wins right to fly to Vietnam

SINGAPORE : Singapore-based budget carrier Tiger Airways said Thursday it has won the right to fly to Hanoi and Ho Chi Minh City in Vietnam and promised to offer fares up to 80 percent cheaper than current ones.

Singapore's Air Traffic Rights Committee awarded the landing rights, the carrier said in a statement.

The airline, 49-percent owned by Singapore Airlines, said it would offer fares up to 80 percent lower than the current levels of between 221-803 Singapore dollars (136-493 US) on other carriers. depending on cabin class.

Last week Tiger Airways opened an office in the Vietnamese capital Hanoi. Ho Chi Minh City is Vietnam's southern business hub.

"We are delighted by this good news. Landing rights to Vietnam signal the start of our second-phase network expansion to Southeast Asian destinations," said Tiger Airways chief executive Tony Davis.

He said the company, whose planes already fly to Bangkok, will announce the date of the first flights to Vietnam soon.

The airline also said it will start flying to the northern Thai city of Chiang Mai from February 18, adding to its services to Bangkok, Phuket and Hatyai.

From February 4 the airline will offer a promotional fare of 9.98 Singapore dollars for a one-way ticket to Chiang Mai.

Tiger Airways is in competition with an array of budget airlines in the region, including Singapore-based Valuair, Qantas-backed Jetstar Asia and Malaysia's AirAsia. - AFP

Copyright © 2005 MCN International Pte Ltd

Budget carrier JetStar Asia to fly to new Asian destinations

JetStar Asia is set to become the first Singapore-based budget carrier to fly to India.

Its COO Con Korfiatis revealed on Thursday that the carrier has received air rights to Kolkatta.

full story:http://www.channelnewsasia.com/stories/singaporebusinessnews/view/130715/1/.html

Feb 5, 2005
Budget carrier Awair drops plans to fly here

INDONESIA-BASED budget carrier Awair has aborted plans to fly to Singapore, citing delays in obtaining regulatory approval from the Civil Aviation Authority of Singapore (CAAS).

The airline, which is 49 per cent owned by Malaysian budget carrier AirAsia, was forced to cancel its Jan 19 inaugural Jakarta-Singapore flight when it failed to get the green light in time from CAAS.

In a statement yesterday, the airline's president director Sendjaja Widjaja said it decided to drop the service after it failed to obtain any indication in the past two weeks about its application for landing rights at Changi Airport.

'We're very disappointed and puzzled over the lack of response from CAAS,' he said.

'We'd hoped for CAAS to efficiently review all documents that had been submitted to it.

'We have no choice but to... cancel the Singapore-Jakarta service as there has not only been no feedback but also any indication of when a resolution can be achieved.'

Passengers who had booked flights on the service can either transfer their booking to other Awair destinations or arrange a refund.

In place of flying to Singapore, the airline has decided to introduce a new domestic service, possibly between Jakarta and Padang, and focus on strengthening flights between Jakarta and Malaysia.

However, its version of events that led to its decision yesterday differs from that of CAAS.

The authority has maintained all along that Awair submitted all the documents needed for approval only the day before it was due to begin flying.

The application could not be processed in time, said CAAS, as it had to make sure the carrier met all necessary regulatory requirement, in the interests of the travelling public.

Asked about the airline's latest comments, a CAAS spokesman said it heard about Awair's decision to drop its plan to fly to Singapore only via the media.

'We haven't received official notification from the airline.'

The spokesman added that the authority has always welcomed Awair flying to Singapore, but reiterated that it had to review the documents to make sure everything was in order.

Since receiving the carrier's outstanding documents on Jan 18, CAAS has been in contact with the carrier, the spokesman added.

'CAAS had also promised to inform Awair as soon as its application is approved.

'We regret if indeed Awair has decided to drop its planned Singapore-Jakarta service.'

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Business Times - 07 Feb 2005

Tiger Airways applies for landing rights to Manila

SINGAPORE - Singapore-based low-cost carrier Tiger Airways on Monday said it had applied for rights to fly into Clarke Field, in Manila.

In an e-mailed statement, the airline said it was 'confident operations to Clark Field can start in time for the busy Easter holiday season'.

Clark Field, roughly 30 sq km in size and located 77km north of the Philippine capital, used to be a US military air base. It is now a special economic zone that hosts the offices of 156 national and international companies.

Tiger Airways currently flies to Bangkok, Phuket and Hat Yai. It will soon add Chiang Mai, Thailand, and Vietnam's Hanoi and Ho Chih Minh cities to its list.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 08 Feb 2005

Private Indian carriers set to fly to Malaysia, Singapore

NEW DELHI - Private Indian carriers are set to fly to Malaysia and Singapore for the first time in a move that could see airfares plummeting in one of the region's busiest sectors, aviation officials said on Tuesday.

India's civil aviation ministry has allowed the country's biggest private airline Jet Airways to operate daily flights between Bombay and Singapore, and Madras and Malaysia's capital Kuala Lumpur, a ministry spokesman said.

It also gave permission to private carrier Sahara Airlines to fly daily between the Indian capital New Delhi and Singapore, and between Madras and Kuala Lumpur.

The ministry also allowed state-carriers Indian Airlines and Air-India more than 1,000 extra seats to Singapore.

'I think prices will go down. There will be healthy competition. Tourism from these countries will also increase,' said Subhash Goyal, president of the private Indian Association of Tour Operators.

Both Jet and Sahara have new planes that are capable of matching the standards of Singapore Airlines and Malaysian Airlines -- something India's state carriers have found hard to achieve.

The new flights are likely to start in March or April ahead of the summer season rush.

Private Indian carriers are scheduled to start operations to London during the summer season.

The Indian government only recently allowed private carriers to fly overseas beyond the South Asian region as many of the route entitlements of state carriers were left unused due to lack of fleet capacity.

The number of flights to each country is negotiated separately. Out of the total flights, private carriers are awarded routes based on their experience and track record.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 08 Feb 2005

AirAsia mulls legal action against S'pore Govt for blocking flights: report

KUALA LUMPUR, Malaysia - Malaysia's AirAsia is mulling legal action against the Singapore Government after it refused to give the airline's Indonesian joint venture permission to fly to the city-state, a news report said on Tuesday.

AirAsia executive director Kamaruddin Meranum was quoted by The Star daily that Singapore's refusal to approve the Awair flights was 'clearly a case of protectionism' to safeguard the interests of Singapore-based airlines.

'Our legal team is looking at the issue,' he said. 'We have suffered undue financial loss because of this and should be compensated.'

Mr Kamaruddin and Singapore officials were not immediately available for comment on Tuesday.

AirAsia, South-east Asia's biggest and only publicly listed low-cost carrier, last year spent a token US$2 for a 49 per cent stake in Awair, which had ceased operating in 2002.

AirAsia now serves routes in Malaysia, Indonesia and Thailand, but hopes to eventually fly to China, India and the Philippines.

But the airline is facing growing competition from rivals in the no-frills sector such as Thailand's Nok Air, Singapore's privately owned Valuair, Singapore Airlines' unit Tiger Airways, and Jetstar Asia, an offshoot of Australia's Qantas Airways.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 16 Feb 2005

Star Cruises, Valuair offer fly-cruise deal

By VEN SREENIVASAN

(SINGAPORE) As expected, Malaysia's Star Cruises has tied up with Singapore's Valuair to launch Asia's first fly-cruise packages to Bangkok.

The package enables passengers to fly to Bangkok with Valuair, and cruise back to Singapore onboard the luxury vessel SuperStar Virgo. The cruise will also stop at Ko Samui, the popular Thai beach resort, on route to Singapore.

The package comes two months after Star Cruises, the world's third largest cruise operator with a fleet of 20 ships in service and under construction, announced it was investing in the Singapore discount carrier in December last year.

No numbers on the value of the investment was disclosed, but sources close to the two sides told BT that Star Cruises had injected up to US$15 million into the discount airline, making it the latter's single largest shareholder.

The Bangkok/Ko Samui fly-cruise package starts at $6,991 on a twin-share basis and includes three nights onboard SuperStar Virgo from Bangkok to Singapore, a one-way economy class ticket (SIN to BKK) by Valuair, two nights hotel accommodation with breakfast at Asia Hotel (Bangkok) and all airport/hotel/port transfers.

Star Cruises and Valuair have also launched fly-cruise packages for the Thai market with 6D5N and 4D3N holidays starting at 27,840 baht (S$1,194) and 20,405 baht respectively.

The packages, which start next month, include hotel stays in Singapore.

Star Cruises said that its latest packages would stimulate tourist traffic from Thailand, which is one of Singapore's top 10 markets in terms of tourist arrivals.

'Star Cruises and Valuair have worked very quickly to put together this unique fly-cruise package which offers great value for passengers who want a varied combination of activities for their holiday,' said Michael Goh, general manager (Singapore) of Star Cruises.

More than 130,000 in-bound tourists from markets as diverse as India, Australia, China, Indonesia, Malaysia, Japan and the UK visit Singapore each year for Star Cruises holidays. They account for about 40 per cent of Star Cruises passengers embarking in Singapore.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 18 Feb 2005

Tiger may form KL venture to ply S'pore-M'sia route

By VEN SREENIVASAN

(SINGAPORE) Low cost carrier Tiger Airways is looking into setting up subsidiaries and joint ventures in regional countries where regulatory hurdles currently prevent it from flying there.

While not spelling out specifics, the Singapore Airlines associate's chief executive, Tony Davis, hinted that one market the airline was looking at was Malaysia.

Currently, the Singapore-Kuala Lumpur route is protected market served almost exclusively by SIA and Malaysia Airlines, which have about 180 flights a week. It is an open secret that low-cost carriers such as AirAsia, Valuair, Jetstar Asia and Tiger Airways would love to fly from Singapore to Kuala Lumpur and other destinations in Malaysia.

But having a locally incorporated joint venture would enable these carriers to sidestep the existing obstacles.

Indeed, recent Malaysian media reports have hinted that some Singapore-based carriers are looking at setting up a locally incorporated unit in Malaysia.

The Star newspaper recently reported that Tiger could tie up with Penerbangan Malaysia Bhd, a subsidiary of national investment vehicle Khazanah Nasional Bhd, to establish an operation in Kuala Lumpur.

Meanwhile, Malaysian tycoon Syed Mokhtar Al-Bukhary, who controls Johor's under-utilised Senai Airport, was recently reported to be in talks with Singapore's Valuair over acquiring a stake in the discount carrier.

Some industry insiders reckon that Syed Mokhtar would find it easier 'doing a deal' with Tiger, whose shareholders include Temasek Holdings. Syed Mokhtar is said to be close to the Singapore investment firm.

On his part, Mr Davis said that it made strategic sense for LCCs to fly to cheaper secondary airports such as Senai. But he added that airline operators would also have to sell 'through fares' offering passengers from metropolitan catchment areas (such as Singapore) seamless road connectivity to these airports.

Tiger will be offering such through fares on its Singapore-Macau flights, which is due to start in May.

'With Hong Kong's Disneyland opening this autumn, we are looking at working with ferry and bus companies in Macau to offer through fares to Hong Kong, and also other road destinations in China,' he said. Passengers will buy these 'bundled' tickets, which include both air and onward transfer fares to Hong Kong and southern China destinations, via Tiger's website.

'There are many places in the region where access by road is cheaper and easier,' Mr Davis said. 'Our strategy would be to fly to cheaper secondary airports, but offer road and sea connectivity. We have to be creative and come up with news ways to operate and grow the business.'

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 25 Feb 2005

Budget carriers fight against overcapacity

By VEN SREENIVASAN

(SINGAPORE) When resources outpace routes, the result is costly overcapacity. This is the reality that some of Singapore's low-cost carriers are waking up to after a year of fast-paced growth.

Faced with delays in getting permission to fly to new routes, some have been chartering out aircraft, seconding their crew to other airlines and even mothballing planes.

Jetstar Asia is dropping at least one route (Pattaya) and chartering out planes and crew to other airlines, and is sending back two of its four aircraft to Australia-based Jetstar (though these were short-leased aircraft anyway).

Meanwhile, Jetstar's chief operating officer Con Korfiatis is headed back to parent Qantas soon. Replacing him is Qantas veteran Ken Ryan, who took over as CEO this week.

Mr Korfiatis' departure is not totally unexpected as he had always hinted he was on secondment and could return after getting Jetstar off the ground.

Nevertheless, the capacity challenges faced by Jetstar are not peculiar to the airline.

Singapore Airlines' no-frills associate Tiger Airways is suffering from plummeting traffic on its Hatyai route amid the troubles in Southern Thailand. But the budget carrier insisted it had no plans to pull out of any routes yet.

Besides Hatyai, Tiger also uses its four planes to fly to Bangkok, Phuket and most recently, Chiangmai, and will soon be starting flights to Macau, Ho Chi Minh City and Hanoi.

Meanwhile, discount carrier Valuair, which has three A320 planes, suspended a Bangkok flight yesterday. But Valuair officials insisted it was due to technical reasons. Besides Bangkok, Valuair also flies to Perth, Hong Kong and Jakarta, and recently unveiled fly-cruise packages to Thailand after Malaysian-owned Star Cruises became a shareholder.

Jetstar's operational 'restructuring' comes just weeks after Qantas suggested that its Singapore-based budget carrier could be struggling.

'It's not going as well as we'd hoped,' Qantas' chief financial officer Peter Gregg told reporters in Sydney last week.

The airline admitted that part of the problem lay in delays in getting operating permits to fly on new routes like Surabaya, Manila and Shanghai.

Having pulled out of Pattaya, the no-frills carrier is planning to start twice or thrice-daily flights to Bangkok. It also operates twice-daily flights to Hong Kong and daily flights to Taipei.

The capacity overhang problem for low cost carrier could get worse as they take delivery of more planes this year. Industry insiders say that the operators are coming face-to-face with a reality: regional governments remain reluctant to open their skies to competitors.

'This is not Europe, where low-cost operators can fly just about anywhere, anytime,' said one airline source. 'In this part of the world, national interests, which means national carriers, call the shots.'

In short, prediction about making a quick profit could prove to be too optimistic.

As if to underscore the point, AirAsia last week admitted it would not meet its profit forecast for the year ending June 2005.

Meanwile, faced with regulatory hurdles elsewhere, LCCs flying out of Singapore seem to be focusing on Thailand, especially Bangkok, to fill seats.

The route represents a safe fall-back option for budget carriers as the two countries have a free skies agreement.

'Bangkok is still a prime destination and any serious low cost carrier has to be on this route,' said Shukor Yusof, aviation analyst at Standard & Poor's MarketScope.

But the two-hour route is already one of the most crowded in Asia, with 13 airlines providing 90,000 seats a week via a total of 393 weekly flights. Besides the established players like Singapore Airlines and Thai Airways, it is also served by low cost competitors Tiger Airways (28 flights a day), Valuair (14 flights a week), and Thai Air Asia (24 flights a week). Then there are 5th freedom operators like Cathay Pacific and Finnair.

So, are the region's fledgling regional budget airline operators heading for consolidation?

Probably not.

Peter Harbison of the Sydney-based Centre for Asia-Pacific Aviation sees at least 10 more low cost operators taking to the region's skies by the end of next year.

But many are nevertheless facing a reality check of sorts after enjoying rapid growth in the last 12 to 18 months.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 25 Feb 2005

Jetstar Asia appoints chief exec

JETSTAR Asia, the no-frills airline part-owned by Qantas, announced on Friday the appointment of Ken Ryan as chief executive of the Singapore-based carrier.

In an e-mailed statement, airline chairman Geoff Dixon said Mr Ryan has extensive experience in aviation, including in the Asian market.

'Ken has been with Qantas for more than 10 years and has held a number of senior executive roles, including regional general manager for Qantas and British Airways for South East Asia, based in Singapore,' Mr Dixon said.

He also said Con Korfiatis, chief operating officer of Jetstar Asia, will return to Qantas.

The airline had recently revealed that it has not been doing as well as first hoped. It said terrorism fears, the tsunami in December and problems over new landing rights have contributed to the company's commercial woes.

'Delays in getting flying permits to certain parts of Asia are likely to cause Jetstar Asia utilisation problems with its fleet of four Airbus 320s,' Mr Dixon had said.

Qantas owns 49 per cent of Jetstar Asia while another 19 per cent is held by the Singapore Government arm Temasek Holdings and the rest by other Singapore investors.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 25 Feb 2005

Tiger Airways adds flights to tsunami-hit Phuket

SINGAPORE - Tiger Airways, a budget carrier backed by Singapore Airlines (SIA), said on Friday it will launch a second flight to Phuket from next month as tourism in the tsunami-hit Thai resort recovers.

The additional flight would initially operate twice weekly from end-March, increasing to a daily service during the peak summer season, the airline said in a statement.

'The second flight to Phuket is a demonstration of our confidence that the Thai tourism industry is solidly back on its feet after December 2004,' said Tiger Airways chief executive Tony Davis.

The carrier currently operates a daily flight to the Thai resort island.

More than 5,000 people were killed in southern Thailand when the tsunamis struck Indian Ocean coastlines on Dec 26 last year, with Phuket one of the hardest hit areas in the country.

Mr Davis said demand for flights to Phuket have been robust over the past six weeks after Tiger Airways tied up with the Tourism Authority of Thailand to encourage travellers back to the island.

Tiger Airways, in which SIA owns a 49-per cent stake, also flies to Bangkok, Chiang Mai and Hatyai.

The Chiang Mai service, introduced only last week, had been 'so encouraging' the airline was considering increasing the frequency of flights from four times a week to daily, Mr Davis added.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Boom for Asian budget travel



BY B.K. SIDHU


MANY people in Singapore remembered AirAsia because it was the first low cost carrier (LCC) to give them a taste of low airfares.

Even taxi drivers knew more of the Malaysian-based AirAsia Bhd than some of their own low fare to mid frills carriers. That shows the power of the AirAsia brand overseas.

But AirAsia had tried in vain to get into Singapore, be it via Johor Baru or even Indonesia.

On the reverse, Singapore's airlines seem to be gaining ground in Malaysia.

The sudden signing of a code share agreement last week between Singapore’s SilkAir, Singapore Airlines (SIA) and Malaysia’s national carrier Malaysia Airlines (MAS) for some Malaysian routes, including east Malaysia, came as a surprise to many.

They could not comprehend how a Singapore carrier was suddenly given the rights to fly into what is perceived as a lucrative East Malaysian air travel sector.

The question being asked is whether the signing alluded to Malaysia allowing more Singaporean players into its air travel industry?






http://biz.thestar.com.my/archives/2005/2/28/business/p1_hotdeals.jpg





If so, three more Singapore budget carriers are eager to come on board too.

“We will be there in a flash if the Government allows it.

“Penang and East Malaysian destinations such as Kuching and Kota Kinabalu are all attractive points to fly into if there are no encumbrances and available traffic rights,” Valuair chief executive officer Sim Kay Wee told StarBiz in Singapore.

Qantas-backed, Jetstar Asia Airways Pte Ltd chief operating officer Con Korfiatis sees enormous potential in the Malaysia market and is keen to enter it.

SIA-backed Tiger Airways is keen on the Kuala Lumpur-Singapore (KL-Sin) sector that is now exclusive to MAS and SIA.

“The KL-Singapore route will be the obvious choice. There is significant volume of traffic through surface transportation such as buses and trains. The introduction of low fares on the KL-SIN route will make it very competitive,’’ Tiger Airways chief executive officer Tony Davis said.

Fuming at these recent developments is incumbent no-frills airline, AirAsia, as it is currently “locked out’’ of Singapore.

AirAsia is against the idea of letting in anymore Singaporean players into Malaysia’s air travel industry.

“If AirAsia is not given rights to fly into Singapore from Jakarta, why should Malaysia allow the Singaporean carriers here?” AirAsia executive director Kamaruddin Meranun questioned.

By giving rights to SilkAir, we are seen to be promoting and enhancing Changi Airport’s connectivity and (helping it become a regional hub).

Should we not be promoting our own KL International Airport (KLIA) as a regional hub? Why such a move and at whose expense?’’ he asked.

Despite AirAsia’s grouses, strong growth is expected this year in the LCC industry and this comes as countries in Asia continue to liberalise their markets.

“This is an exciting time for LCCs in Asia. The doors to new markets have opened and the LCCs have flown in. Those that can identify and secure their market niche, manage costs by concentrating on their core capabilities and adopt an effective distribution network will have a terrific year,’’ Abacus president and CEO Don Birch was reported to have said recently.

Asean countries are expected to adopt an open skies policy between capital cities by 2008, and open skies within Asean by 2011.

The Malaysian government seems to be going full steam ahead to develop a vibrant budget air travel services industry.

This is seen with the entry of SilkAir and the Government's decision last week to spent RM100mil to build a dedicated low cost carrier (LCC) terminal at KLIA instead of Subang.

If the entry of SilkAir and the plan to build a LCC terminal is any indication of its seriousness to liberalise the air services sector, one route that should soon be open to competition is the KL-Singapore sector, said an industry expert.

To Davis of Tiger Airways, the opening of the sector means “competition driving prices down.

Now, travellers pay RM222 one-way for a shuttle ticket. Imagine having to pay only RM9.90 if budget airlines can ply that route. Competition is not necessarily a bad thing. Incumbent players will feel the heat when the markets are forced opened with globalisation. It is a question of how soon they can get used to the idea.

The faster they strengthen themselves the more agile they would be in a competitive environment.

Experts believe there is plenty of room for growth if airfares are kept at reasonable prices. As Sim of Valuair put it: “It is a growing pie and there is room for everyone to grow. It is a matter of seizing the opportunities.’’

Tiger courts partners outside Singapore




BY B.K SIDHU



TIGER Airways' idea of growth is to work with partners to establish operations outside Singapore. It aspires to be the Pan-Asian low cost carrier.

The process to find partners is on going and thus far, the upstart airline has obtained rights to set up a base in Hanoi.

Tiger Airways has to look at establishing bases in other cities and operate in those markets given that there is no domestic market in Singapore like that of Malaysia.

Lack of an open skies policy in several countries in Asia makes it difficult for the airline to ply any route that it wants. The low fare market has a lot of potential in Asia but it would take some time before it develops the same way in Europe.

Despite that, Tiger Airways chief executive officer Tony Davis believes there are plenty of opportunities and it was a matter of being “creative’’ and differentiating the product from the rest of the pack.







http://biz.thestar.com.my/archives/2005/2/28/business/b_04davis.jpg

Tony Davis







To him, if Malaysia's AirAsia could be creative in its approach to penetrate new markets, as in the case of its operations in Thailand, other low fare airlines should be able to do so.

All the aspirations to get partners means the airline was working overtime to find partners. That Davis does not deny.

But he would not say whom and in which countries partners were being courted. It was reported that Tiger Airways had approached a party in Malaysia for a partnership, but Davis did not want to comment.

“We began operations over three months ago and we are open to ideas,’’ Davis said.

The company has Europe’s biggest no frills airline, Ryannair as one of its partners, besides Singapore Airlines and the Singapore government investment arm, Temasek Holdings.

Growing the business is his priority but he believes in taking a pragmatic approach. And for him it is about offering very reasonable priced products as that will drive growth.

“Low cost carriers (LCCs) are good at developing new markets and go places which full fledged carriers would not go,’’ Davis said told StarBiz in Singapore.

“The best routes are the shorter routes where a low fare airline can get more flights within a day. This criteria best suits the Malaysian and Indonesian markets from Singapore (in terms of distance),” he said.

“We have made it clear that Malaysia and Indonesia will be markets we would be interested in. We would like to fly from Singapore to destinations in Malaysia.

“We welcome and are happy to compete with any incumbent carrier there,’’ he said adding that east Malaysia presented a lot of opportunities for the carrier.

In the case of Indonesia, and with the absence of an open skies policy, Tiger Airways has to find ways to enter that market.

Going into new areas to build markets is a strategy and that is why the airline managed to get rights into Hanoi and Ho Chi Minh City. Tiger Airways is the first low fare airline to get rights to fly into Vietnam and has opened an office in Hanoi, which signals the start of its second phase of expansion into South East Asian destinations.

The airline wants to fly into other parts of Indochina, which are not served well from Singapore and several destinations in the Philippines.

“We do not discount Tiger Airways flying to Macau in the future but China is at the edge of our aspirations. Geographically, it is challenging as the country is big,’’ he said.

The airline has several aircraft which are leased. It has arrangements with three leasing companies currently and would announce more leases soon.

“We talk to a number and do not exclude anyone,’’ he said, when asked if Penerbangan Malaysia Bhd – Malaysia’s only commercial aircraft leasing company - was one of its future aircraft leasors.

In December last year, Tiger Airways’ recorded load factor of 76%. It would see a slight dip due to the Dec 26 tsunami effect in January.

“On a sustainable basis we are aiming (load factors) to be in excess of 80%,’’ Davis said.

Low fares the best way to woo travellers: Jetstar Asia





By B.K. Sidhu




THE ability to provide airfares that can stimulate the market is what will differentiate Jetstar Asia Airways Pte Ltd from the rest of the pack. It would do that relentlessly, said its chief operating offer Con Korfiatis.

“We believe in market stimulation rather than stealing from full fledged carriers and still make money. All this is about creating new markets with low cost fares. The branding culture comes after that,’’ he told StarBiz in Singapore.

Of course, the challenges are aplenty while skies are liberalised. But it was a question of remaining cost effective and how quickly you can move to seize opportunities, he said.

To Korfiatis, the success factor for a low fare airline was to have the most competitive cost base. If an airline is into the no-frills business it cannot offer frills or it would be at its own cost.

The idea is to provide basic services and try to sell as many seats in the aircraft, maximize efficiencies, sell directly to the customer, ensure aircraft turnaround time is within the specified time, provide food that generate money, and ensure the employees work hard for the success of the airline.

Korfiatis has worked in Asia the past decade. He is well versed with the Asian culture and ways. He was with Singapore Airlines for several years and was also country manager for Indonesia. He has 15 years of experience in the aviation industry.







http://biz.thestar.com.my/archives/2005/2/28/business/b_05korfiatis.jpg

Con Korfiatis









Today, he is managing the Qantas backed airline that has set sights on several routes.

“The network is very young and with more aircraft we can expand to more routes. We are flying to Hong Kong, Taipei and Pattaya but have rights to Jakarta and Surabaya, where we have yet to begin flights there,’’ Korfiatis said.

The airline has obtained rights from Singapore to fly to Shanghai and another city in China that it has yet to identify; also to Manila and Hanoi in Vietnam. The company has rights into India and Kolkata is where it wants to fly to in the first half of this year.

Australia is the obvious choice given the backing from Qantas. Initial points include Perth and Darwin.

Malaysia remains a destination it wants to explore for it feels there is a big market with a lot of people.

“We see enormous potential not just for the KL-Singapore sector but also resort locations such as Langkawi, Penang and Kuching,’’ Korfiatis said.

Load factors for flights to Hong Kong and Taipei are pretty good but that to Pattaya after the Tsunami is lacking.

“Over time, we would grow the network but we also want to build on increasing frequencies,’’ he said.

The airlines has four aircraft and would be getting four more this year.

Expansion of its fleet would depend on how fast the Asian market opens up. The airline is only interested in short haul routes.

Low-cost terminals at KLIA and Changi to boost travel





By B.K. Sidhu




THE low-cost carriers terminals to be built in KL International Airport and Singapore's Changi Airport will be ready next year to facilitate the growth of budget travelling in the region.

Malaysia has decided to locate its dedicated terminal at the KL International Airport instead of the much-lobbied Sultan Abdul Aziz Shah Airport in Subang. It is a big blow to AirAsia which had preferred the terminal at Subang, but the budget airline now “wants to focus its energies on making the new terminal the centre for low-cost travel in Asia.’’

The terminal will be KLIA's second, while for Singapore, it would be its fourth. Both countries will spend about RM100mil each on the terminals. Malaysia’s terminal will be able to handle 40 aircraft with quick aircraft turnaround of 20 minutes. It will be able to handle 10 million to 12 million passengers a year.

Changi will have a single storey building, able to cater to 2.7 million passengers a year. Tiger Airways has agreed to operate from the terminal. The low cost carrier (LCC) terminals are essential to the operational feasibility of budget airlines. That is why the governments are investing to help grow the budget travel markets. Cost is a major factor in budget travel and that is why the terminals are to be built by the governments to help carriers sustain cost effective operations. But there are other factors, one of which is punctuality as flight delays do not only incur LCCs additional expenses but also create problems for passengers on connecting flights.

“The turnaround times should be kept or otherwise it would knock into the next flight. So the pressure is really to keep flights on time. Thus far we have only cancelled two flights since we started operations. Economics of scale is vital in order to get the seat cost as low as possible,’’ he said.

To Jetstar Asia Airways chief operating officer Con Korfiatis, “reliability, on-time performance, safety, keeping cost low are core components to which the airline places high emphasis on.’’ Prices of seats differ and not all are at one price.






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AirAsia's executive director Kamaruddin Meranum









Many budget airlines also like to claim that they have landing rights to all sorts of destinations. Getting the rights to fly from the home country is only one part of the equation. The difficult part is getting the foreign country to approve the landing rights.

AirAsia’s Indonesian venture, PT Awair is in a limbo over its plans to fly from Jakarta to Singapore. Although PT Awair has submitted all documentation, the Civil Aviation Authority of Singapore (CAAS) has yet to approve the right to land in Singapore.

AirAsia executive director Kamaruddin Meranun was reported to have said: “AWAIR will seek compensation from the Singapore government for blocking the Indonesia-based airline's flights to the city-state from Jakarta.’’

In an e-mail response to a query from StarBiz, CAAS said: “We have only been advised by Awair that the airline is still keen to operate to Singapore, even though Awair has publicly announced its decision to temporarily drop its plans for the Singapore-Jakarta route. We have not received any other notification from Awair. We have said before that in the interest of the travelling public, we have to ensure Awair has met all regulatory requirements before approval is granted. Since Awair submitted the documents to us, CAAS and Awair have been in constant contact. We have also said to them that we will inform them as soon as approval is granted.’’

Business Times - 28 Feb 2005

S'pore budget carriers hope to fly M'sian routes

KUALA LUMPUR - Three Singapore-based budget airlines are hoping to fly Malaysian skies following last week's surprise tie-up between the two countries' national carriers, a report said on Monday.

National flag carriers Malaysia Airlines and Singapore Airlines (SIA), along with its regional wing Silkair, last Thursday signed a codeshare agreement for combined services on some Malaysian routes, including to the northern resort island of Penang, and eastern Sabah and Sarawak states on Borneo island.

The opening up of Malaysian skies to Singapore airlines has sparked hopes for low cost carriers operating in the republic - privately-owned Valuair, Qantas-backed Jetstar and SIA's 49 per cent-owned Tiger Airlines - that they will be allowed on board too, The Star said.

'We will be there in a flash if the (Malaysian) government allows it,' Valuair chief executive Sim Kay Wee told The Star.

'Penang and east Malaysian destinations such as Kuching and Kota Kinabalu are all attractive points to fly into if there are no encumbrances and available traffic rights.'

Tiger Airways is keen to service the Kuala Lumpur-Singapore sector which is now exclusive to Malaysia Airlines and SIA.

'The KL-Singapore route will be the obvious choice. There is significant volume of traffic through surface transportation such as buses and trains. The introduction of low fares on the route will make it very competitive,' said Tiger chief executive Tony Davis.

Jetstar chief operating officer Con Korfiatis said there was huge potential in the Malaysian market and the airline was keen to tap new routes, especially to resort destinations.

Malaysia's decision over the weekend to fast-track the construction of a RM100-million (US$26 million) airport terminal for Asia's growing budget aviation market has fuelled their optimism, the daily said.

The budget terminal at the Kuala Lumpur International Airport (KLIA), which will handle 10 million passengers a year initially, is expected to be ready by June 2006 to rival a similar terminal planned at Singapore's Changi Airport.

Southeast Asian nations are expected to adopt an open skies policy between their capital cities by 2008 and fully liberalise their air travel industry by 2011, the daily said.

Southeast Asia's top no-frills airline, Malaysia-based AirAsia, is against the entry of more Singaporean players and warned that opening up direct routes could marginalise KLIA and hurt Malaysia's ambition to become a regional aviation hub.

AirAsia, which has been blocked from flying to Singapore via Malaysia's southern gateway Johor and through its subsidiary in Indonesia, has accused the republic of trying to prevent it from competing directly with its own budget airlines and national carrier.

'If AirAsia is not given rights to fly into Singapore from Jakarta, why should Malaysia allow the Singaporean carriers here?' asked AirAsia's executive director Kamaruddin Meranun.

'By giving rights to SilkAir, we are seen to be promoting and enhancing Changi Airports connectivity and (helping it become a regional hub). Should we not be promoting our own KLIA as a regional hub? Why such a move and at whose expense?'

Valuair's Mr Sim argued there was still plenty of room for growth, adding: 'It is a growing pie and there is room for everyone to grow. It is a matter of seizing the opportunities.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

March 1, 2005
Valuair sets its sights on eastern Australia
Already flying to Perth, it plans to have low-cost flights to the east before Xmas

By Arnold Gay

SINGAPORE'S Valuair is planning to fly to destinations in eastern Australia as early as September this year.

This could result in fares to Sydney, Melbourne and Brisbane tumbling by up to 25 per cent.

'Australia has been good for us from our Perth experience,' said Valuair chief executive Sim Kay Wee. 'It's a route with good loads and good yields.'

Mr Sim refused to identify specific new destinations and said the airline was in the midst of a feasibility study.

The plans drew some surprise from aviation watchers.

'Everyone's a bit confused about Valuair. It seems as though it's becoming a scheduled airline now,' said Watts Aviation CEO Logan Ravishankar, noting that the typical maximum budget airline range is five hours.

Mr Ravishankar said, to make money, Valuair had to fly to Sydney, Melbourne or Brisbane, all of which are about 7 1/2 hours away.

In response, Mr Sim said, if he could, he would 'fly the world'.

He said Valuair would continue to offer its mid-frills services, at three-quarters the price full-service carriers charge. 'I always try to peg my fares lower than full-service airlines, usually in the range of 25 per cent less.'

An online check with Singapore Airlines (SIA) and Qantas priced return tickets to Sydney at $1,066 for SIA and $804 to $1,106 for the Australian carrier.

Valuair distinguishes itself from other discount carriers by offering basic frills like a higher baggage allowance, food and pre-assigned seats.

Mr Sim said the carrier was looking to add two long-range Airbus A330s for the new Australian routes, and another A320 to its current fleet of four A320s.

'Because of the few aeroplanes that we have, we are still not realising the economies of scale that we need, that's why we want to expand a little faster,' he said.

But Mr Sim said Valuair was having trouble finding A330s to lease, and a more realistic launch date could be December, in time for the peak Christmas period.

'My job is to make sure that happens, hopefully before the year-end peak. Still, you never know, between now and three months' time, things may change.'

Valuair is hoping to connect more Australian passengers to its destinations in Asia, and vice versa. The airline flies to Perth, Hong Kong, Bangkok and Jakarta.

'Passengers will end in Singapore for business reasons, or holiday, and some will go on to other destinations that we fly to.'

Mr Sim also confirmed that Valuair was waiting to fly to China as well. 'We are still waiting for approval... I have got the aircraft, it's a question of where I can fly to to give me good results.'

Touching on the code-sharing agreement between SIA, SilkAir and Malaysia's national carrier Malaysia Airlines, Mr Sim said he was surprised that his airline was not considered for the rights.

'I do not know the details, but I thought it should be between countries, since it is an exchange of rights between countries.'

He said Valuair would love to fly to Malaysia. 'Definitely, if given a chance to fly to Kuching, Kota Kinabalu, Penang, I will.'

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 02 Mar 2005

Jetstar Asia drops Pattaya service, flies to Bangkok instead

SINGAPORE - Singapore-based Jetstar Asia will begin plying the increasingly busy Bangkok route from March 23 after cancelling its Pattaya service due to poor demand, the Qantas-backed budget carrier said on Wednesday.

To promote the launch of the Bangkok service, Jetstar Asia will give away 1,000 tickets for a return trip between the two cities for bookings made on its website between March 3 and 16.

During the promotional period, tickets for a one-way trip to Bangkok will start from S$28 (US$17).

'Bangkok remains one of the top business and tourist destinations in the region and is an incredibly popular destination with Singaporeans,' Jetstar Asia's head of marketing Dorit Grueber said in a statement.

However, opening the Bangkok route led to the termination of the service to the beach resort of Pattaya, a popular coastal tourist area with a reputation for a seedy nightlife.

Jetstar Asia last week suspended its Pattaya service, citing slow sales, but did not rule out flying there again in the future if market conditions improved.

'With a limited number of aircraft available to us, we made the tough decision to redirect our assets towards serving a destination that continues to see growth in demand,' Jetstar Asia's vice-president of operations, Greg Thompson, said.

Jetstar Asia, in which Australian national carrier Qantas has a 49 percent stake, began commercial flights in December with services to Pattaya, Hong Kong and the Taiwan capital of Taipei.

The introduction of budget airlines to the Bangkok-Singapore route over the past year, with the Thai subsidiary of Malaysia's AirAsia and Singapore-based Valuair joining the fray, has dramatically cut airfares between the cities.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 02 Mar 2005

Jetstar Asia, Tiger Airways announce new routes

SINGAPORE - Two Singapore-based budget carriers announced new service routes on Wednesday as the rivalry for the Asian low-fare market further intensified.

Qantas-backed Jetstar Asia said it will begin plying the increasingly busy Bangkok route from March 23 after cancelling its Pattaya service due to poor demand.

In a separate statement, Tiger Airways, which is 49 per cent owned by Singapore Airlines, announced what it described as a 'major' network expansion with flights to Macau from March 25, Ho Chi Minh City from April 1 and Hanoi from April 7.

To promote the launch of the Bangkok service, Jetstar Asia will give away 1,000 tickets for a return trip between the two cities for bookings made on its website between March 3 and 16.

During the promotional period, tickets for a one-way trip to Bangkok will start from S$28 (US$17).

'Bangkok remains one of the top business and tourist destinations in the region and is an incredibly popular destination with Singaporeans,' Jetstar Asia's head of marketing Dorit Grueber said in a statement.

However, opening the Bangkok route led to the termination of the service to the beach resort of Pattaya, a popular coastal tourist area with a reputation for a seedy nightlife.

Jetstar Asia last week suspended its Pattaya service, citing slow sales, but did not rule out flying there again in the future if market conditions improved.

'With a limited number of aircraft available to us, we made the tough decision to redirect our assets towards serving a destination that continues to see growth in demand,' Jetstar Asia's vice-president of operations, Greg Thompson, said.

Tiger Airways said it will operate five flights a week to Macau, four flights a week to Ho Chi Minh City and three flights a week to Hanoi. It will also fly a second daily flight to the tsunami-hit Thai resort of Phuket from March 25.

The second daily evening flight to Phuket will be thrice weekly, raising its number of flights to the resort to 10 a week.

'Our increase in flights to Phuket also shows that our efforts to work with the Tourism Authority of Thailand to bring back the tourists are paying off and reinforces our long term commitment to all of our routes,' said Tiger Airways chief executive Tony Davis.

Jetstar Asia, in which Australian national carrier Qantas has a 49 per cent stake, began commercial flights in December with services to Pattaya, Hong Kong and the Taiwan capital of Taipei.

Valuair is the third Singapore-based budget airline and Malaysia's AirAsia also flies between Bangkok and Singapore.

Among the other cities serviced by the three Singapore-based airlines are the West Australian capital of Perth, Shanghai and a range of Malaysian cities.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Valuair(3/3/05):

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Business Times - 03 Mar 2005

Travel free on Jetstar inaugural flight to Bangkok

By VEN SREENIVASAN

(SINGAPORE) Free flights to Bangkok!

That is what Qantas associate, Jetstar Asia, is offering on its coming twice daily inaugural Singapore-Bangkok flights.

To celebrate the launch of the service on March 23, the Qantas subsidiary is offering 1,000 tickets free on a first-come-first-served basis, on top of introductory fares starting from $28 each way. These tickets can be booked between March 3 and 16, for travel through May 27.

The Bangkok services replace Jetstar's daily service to Pattaya, which the airline had dropped due to poor loads.

It expects to do better on the Singapore-Bangkok route.

Bangkok remains one of the top business and tourist destinations in the region, and is an incredibly popular destination with Singaporeans, said Jetstar Asia's head of marketing, Dorit Grueber.

'From weekend treats to week-long shopping trips, the demand for travel to the Thai capital has continued to rise throughout the past several years and we are confident of being able to help even more people in Singapore experience the delights, adventures and wonderful cultural offerings that Bangkok provides in such abundance,' she said.

But the two-hour route is also one of the most crowded in Asia, with 13 airlines providing 90,000 seats a week via a total of 393 weekly flights. Besides the established players like Singapore Airlines and Thai Airways, it is also served by low cost competitors Tiger Airways (28 flights a day), Valuair (14 flights a week), and Thai Air Asia (24 flights a week). Then there are 5th freedom operators like Cathay Pacific and Finnair.

Jetstar last week announced that it had appointed Qantas veteran Ken Ryan as its chief executive, to take over from outgoing chief operating officer Con Korfiatis.

Jetstar Asia is a partnership between Qantas (49 per cent), businessmen Tony Chew (22 per cent), FF Wong (10 per cent), and Temasek Holdings (19 per cent). Besides Bangkok, it also flies to Taiwan and Hong Kong.

In a separate announcement, Jetstar's rival Tiger Airways said it would start flights to Macau on March 25, Ho Chi Minh from April 1 and Hanoi from April 7.

The Singapore Airlines budget associate will operate five flights a week to Macau, four flights a week to Ho Chi Minh and three flights a week to Hanoi. It is also starting a second daily evening flight to Phuket, raising to 10 the number of weekly flights to the Thai resort.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Tiger Airways(3/3/05):
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March 4, 2005
Missing pilot grounds flight

By Vivi Zainol

PASSENGERS on a Jetstar Asia flight to Singapore were delayed for about four hours at Hong Kong International Airport last night, when the pilot did not turn up.

The pilot for the 7.10pm flight, 3K006, did not report for duty, and the flight was rescheduled three times, until a replacement pilot arrived at 11.15pm.

Exhibition executive Christine Ching, 25, said there were no announcements about the delay, though airline staff said the captain had flown to Australia on sudden compassionate leave.

Some of the 30 to 40 frustrated passengers decided to postpone their flights to the next day.

Singapore-based Jetstar Asia was the third discount carrier to take off from Changi Airport when it began its operations in December.

It offers flights to Hong Kong, Bangkok and Taipei.

Mr Simon Nowell, the handling agent for Jetstar in Hong Kong, told The Straits Times he was not in a position to answer queries. The Jetstar office in Singapore could not be contacted.

Business consultant Alvin Ang, 35, eventually boarded the plane, but the experience has turned him off budget airlines.

'I'm willing to pay more to avoid such an experience,' he said.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Tiger Airways(3/3/05):

I like the livery. Two thumbs up! :)

Jetstar at the T3 site (Picture taken from T1 viewing mall, 3/3/05):

http://img65.exs.cx/img65/1889/pic0039414ht.jpg

Looks evil :happy:

both Tiger and Jetstar have very impactful liveries

Hmm....just try booking a ticket to Macau for the June period(13-17June) on the Tiger website.......The total cost including tax only cost S$159.96.......seems like a cheap alternative to go HK compare to Jetstar's S$260 (13-17June with tax, go to HK direct) and Valuair's S$391 (13-17 June with tax, go to HK direct)

Hmm....just try booking a ticket to Macau for the June period(13-17June) on the Tiger website.......The total cost including tax only cost S$159.96.......seems like a cheap alternative to go HK compare to Jetstar's S$260 (13-17June with tax, go to HK direct) and Valuair's S$391 (13-17 June with tax, go to HK direct)

Hmm......but then the total cost including the express ferry from Macau to HK cost HK380 (about S$80)......so i think Jetstar offers the best deal then....:yes:

I am going to HK by Jetstar end May. Paid $240 for it.

I am going to HK by Jetstar end May. Paid $240 for it.

Take pictures, can?? .......:D

What kind of pictures are you thinking of?

What kind of pictures are you thinking of?

Thinking of pictures of airport, picture of the airplane(exterior and interior).......Just take a few whenever you like loh......:yes::)

I see. Will try to take some if I remember then.

10 March 2005

New Indonesian restriction stops AWAIR's flight to Singapore
By Thomas Cho, Channel NewsAsia

SINGAPORE : There has been a new twist to the AWAIR saga.

In a statement on Thursday, the Civil Aviation Authority of SIngapore (CAAS) said it was unable to proceed with AWAIR's application to fly to Singapore because of a new restriction imposed by Indonesia.

Two months ago, AWAIR was raring to go and looking forward to launch its Jakarta-Singapore flights. But its maiden flight did not take off.

The CAAS said then that it was still processing AWAIR's application to fly to Singapore because certain documents had been submitted late.

Then last month, AWAIR stepped up the pressure by saying it was tired of waiting and had decided to abandon its plan to fly to Singapore.

In a new twist on Thursday, the CAAS said it was unable to proceed with the application because Indonesian authorities intended to introduce a new restriction on services by low-cost carriers to and from certain points in Indonesia.

No details were given but CAAS said it was in contact with its Indonesian counterpart, hoping to facilitate the operations of all carriers from both countries.

It told Channel NewsAsia that it looked forward to the lifting of the restriction.

Meanwhile, AWAIR's President Director Sendjaja Widjaja said the carrier wished to make an appeal to the CAAS on its decision.

AWAIR is 49 percent owned by Malaysia's AirAsia. - CNA

Copyright © 2005 MCN International Pte Ltd

I didnt know this incident can become so complicated with the Indonesian authorities ^

then again they have been protectionist against SIA in the past, complaining about Megatops on the SIN-JKT route

Business Times - 16 Mar 2005

Tiger Airways to fly to the Philippines in April

SINGAPORE - Singapore-based regional budget airline Tiger Airways on Wednesday began selling tickets for flights to the Philippines to be launched next month.

The airline will fly three times weekly from Apr 5 to Clark Field, a former US air force base some 80 kilometres north of Manila that has been converted into a commercial airport.

The Singapore-based carrier will raise the frequency of the flights to five times a week in June, it said in a statement.

Fares for a one-way trip to Clark Field will start from $25.98 (US$16).

More than 90,000 Filipinos reside in Singapore, according to the Philippine embassy. Singapore is also used as a travel hub by Filipinos working in other countries in Asia, the Middle East and Europe.

Tiger Airways currently flies to Bangkok, Phuket, Hatyai and Chiang Mai. It will start flying to Ho Chi Minh City, Hanoi and Macau next month.

The carrier, 49-per cent owned by Singapore Airlines, is in competition with an array of budget airlines in the region, including Singapore-based Valuair, Qantas-backed Jetstar Asia and Malaysia's AirAsia.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

17 March 2005

Qantas' Jetstar Asia may sub-lease aircraft as growth strategy stalls

SYDNEY : Qantas Airways' move into the burgeoning Asian budget airline market has failed to gain traction, with its 49 percent-owned Jetstar Asia conceding it may have to lease out part of its aircraft fleet.

Qantas spokesman Michael Sharp told Thursday's Sydney Morning Herald the Singapore-based airline, launched just three months ago, had been frustrated in its attempts to gain traffic rights in the key Indonesian and Chinese markets.

As a result, Jetstar, which so far has cost Qantas 23.5 million dollars (18.6 million US), is facing a challenge finding new destinations for its existing four Airbus A320s and will "look to lease out some of the aircraft it ordered" if it does not gain additional traffic rights this year, Sharp said.

Jetstar is scheduled to take delivery of another four A320s before November and the newspaper said it is understood the airline already has advertised within the industry to lease out the four aircraft.

In addition to Taipei and Hong Kong, Jetstar Asia recently started services to Bangkok and is on the verge of gaining rights into the Philippines using its existing four aircraft.

The airline is set to take delivery of its fifth leased A320 by May but has asked the aircraft's owner -- International Lease Finance Corp in Los Angeles -- to find another taker for the jet, the newspaper said.

The four remaining jets have been leased from ILFC for five years and Jetstar may have to sub-lease them at a significant loss.

The company had no further comment on the report.

Qantas' partners in Jetstar are Singapore's Temasek, which owns 19 percent, and Singaporean businessmen Tony Chew and FF Wong, who own the remainder.- AFP

Copyright © 2005 Agence France Presse. All rights reserved.

Business Times - 22 Mar 2005

Valuair plans public listing in 2 years

SINGAPORE - Valuair Ltd, a Singapore-based budget airline, is aiming for a public listing in two years as it seeks more funds for expansion, the airline's chief executive said on Tuesday.

'We hope to go for an initial public offer around 2007-2008, when we will have a track record of three years,' Sim Kay Wee told Dow Jones Newswires in an interview. He said the airline is on track to break even by March 2006.

The funds raised will help Valuair expand its fleet and fly to destinations further away, he said. The airline currently flies twice daily to Bangkok and Hong Kong and once daily to Jakarta and Perth in Australia.

Valuair, which started commercial flights in May 2004, was among three budget or low-cost airlines that started in Singapore last year to wrest a share of the economy travel market from full-service airlines such as Singapore Airlines.

Valuair faces tough competition from Singapore Airlines affiliate Tiger Airways and Qantas Airways affiliate Jetstar Asia, both of which are based in Singapore, and Malaysia's AirAsia, which flies to Singapore via Bangkok.

Apart from AirAsia, which listed in October 2004, most of the region's budget airlines are unlisted.

Valuair intends to add another two longer-range Airbus A330 or A340 aircraft and two A320s to its current fleet of four A320 aircraft.

'The longer-range aircraft will give us a 7-8 hour flying radius, and places within that range are eastern Australia, northern China, Japan, northern India, Pakistan and the Middle East,' Mr Sim said. 'We expect to introduce flights to eastern Australia, Japan and hopefully, northern China by October or November.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

March 22, 2005
Tiger Airways flies to Padang

BUDGET carrier Tiger Airways will fly to the Indonesian city of Padang come May and has asked for landing rights in both Jakarta and Medan too, its spokesman said yesterday.

Tiger Airways applied to fly to Jakarta and Medan late last year, even before Indonesia said it was seeking to impose restrictions on budget carriers from Singapore flying to Jakarta, Surabaya, Medan and Denpasar earlier this month.

The issue surfaced when aviation authorities from the two countries were asked to comment on the delay faced by Indonesian budget airline Awair in getting the approval to fly to Singapore.

The spokesman said Tiger Airways is the first budget carrier to get landing rights to Padang, but the airline has heard no news about its quest to fly to the other two cities.

Meanwhile, its initial thrice-weekly flights to Padang, capital of West Sumatra, will start on May 19, with tickets on sale from today.

Prices start at just $4.98 for a one-way trip, excluding taxes and charges, and bookings can be made from its website at www.tigerairways.com

Its CEO Tony Davis said: 'We have the ability, we have the planes, we have potential customers all ready to experience what would be one of the lowest, if not the lowest fare, offered by any airline to Indonesia.'

The airline is now recruiting both pilots and cabin crew in Singapore.

THERESA TAN

Copyright © 2005 Singapore Press Holdings. All rights reserved.

March 25, 2005
Cheaper air fares to India soon
Prices expected to fall as 2 new carriers will start flying there; another is in talks with CAAS

By Krist Boo

BUSINESSMAN S. Supramaniam, 47, is sick and tired of overbooked flights and overpriced tickets to India. That is why he is looking forward to April and May.

The reason: Two new Indian carriers will start plying the route to the subcontinent - Jet Airways from next month and Air Sahara a month later. And a third carrier is now in talks with the Civil Aviation Authority of Singapore (CAAS).

They break the long-standing grip on the lucrative sector by Singapore Airlines and subsidiary SilkAir, Air India and Indian Airlines.

Although they are not budget carriers, the latest entrants will be a boon to travellers as they will push fares down drastically, analysts and travel agents said.

Delhi-based analyst Kapil Kaul, from the Centre for Asia-Pacific Aviation, expects return fares to slide to between $550 and $700 in 18 months. The current rate is about $900.

Fares could go as low as $390 if India opens up to Singapore-based budget carriers such as Valuair and Jetstar Asia, he said.

Those doors will open, Mr Kaul said, as India finds other suppliers for global travel over the next few years, while its own airlines beef up their fleets and long-haul capabilities.

SIA, which operates almost a third of the 194 weekly flights from Singapore to 11 cities in India, said its fares will 'remain competitive'.

Newcomer Air Sahara has already turned on the heat by promising bargain-basement return fares at a promotional $374 on its launch.

But even before Air Sahara's first flight, SIA has slashed its prices - a promotion fare of $498 for return tickets to any of four selected Indian cities.

Air Sahara president Rono Dutta told The Straits Times: 'Fares should drop by about 10 to 15 per cent with our entry.'

Jet Airways, which is well-known at home for its service and is India's largest domestic carrier by market share in India, has not firmed up prices.

Its first destination from Singapore will be Mumbai, followed by Chennai and capital Delhi, said its Singapore country manager Joseph Loh.

Its downtown ticketing office will be up by next week.

Increased flights would bring more Indian visitors here. Some 471,000 Indians came last year, the sixth largest group among all tourists.

With only 3 to 5 per cent of India's 1.1-billion population travelling by air, it is a huge market to be tapped.

Already, both air and cargo traffic between the two countries have jumped almost a quarter last year over 2003.

For Mr Supramaniam, who flies to India about twice a year, the entry of new players on the route is overdue.

He will 'double' his trips if fares drop a third of the $800 he paid for a ticket two weeks ago.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 25 Mar 2005

Jakarta move on budget airlines hurts industry: analysts

By VEN SREENIVASAN

INDONESIA'S decision to bar low-cost foreign airlines from flying into its key cities is as much a blow for Asean aviation integration as it is for the airlines themselves, analysts say.

In a move which surprised the market, Indonesia this week said it was closing its skies to foreign budget carriers flying into Jakarta, Medan, Surabaya, Denpasar (Bali), Jogjakarta and Semarang. Together, these six cities account for over 80 per cent of overseas inbound travel to the archipelago.

Indonesian Transportation Minister Hatta Rajasa said the move would protect domestic players, led by national airline Garuda, which was suffering dismal loads on services to some of these cities.

The move is not retroactive, meaning that existing operators can continue to fly into their respective Indonesian destinations. Currently, Valuair flies to Jakarta while Tiger Airways has just announced services to Padang.

But it is a major blow for others, including Qantas's Singapore-based associate Jetstar Asia, which had applied to fly to Surabaya and Jakarta.

Analysts expressed surprise at the Indonesian move. 'This is a bolt from out of the blue,' said Shukor Yusof. 'It's difficult to understand the motive.'

But others were less generous, pointing out that the Indonesians were out of step with the region.

'The Indonesians do not seem to be in tune with the rest of the region, which is moving towards free skies,' said one industry observer who declined to be named. 'Even China and India are opening up their skies.'

Come 2008, Asean nations will be opening their capital cities to unlimited access to carriers from other member states.

By 2015, it is envisaged that Asean will have full open and free skies, allowing carriers from the 10 member countries to fly to any destination within the region without restrictions.

Singapore, Malaysia and Thailand have started moving in this direction.

While Singapore and Thailand have a free skies agreement, Malaysia and Singapore took steps towards more co-operation last month with an agreement between their national carriers to code-share, spread loads, cut costs and boost traffic.

Industry insiders also wonder how the Indonesians expect to protect their domestic carriers, including flag carrier Garuda, by keeping out only the low-cost carriers (LCCs).

'Whether or not there are LCCs, Garuda and the other domestic players there already face plenty of competition from other established players around the region,' said the airline official.

'At the end of the day, it is their tourism and travel industry, as well as their people who will end up subsidising their loss-making domestic carriers,' the official added.

Garuda, whose fleet of 67 aircraft flies to 54 domestic and international destinations, has been facing mounting competition from budget airlines and soaring fuel prices ahead of plans for an initial public offering in 2007.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 25 Mar 2005

Jetstar scrambles for new routes to Philippines, India

Move partly due to Jakarta's freezing of new traffic rights to foreign LCCs

By VEN SREENIVASAN

(SINGAPORE) Thwarted in its efforts to quickly clinch routes into major markets such as Indonesia, China and Vietnam, Jetstar Asia is moving to secure new routes into other markets, including the Philippines and India.

The scramble for new routes has taken on greater urgency for the Qantas' associate in the wake of the Indonesia's declaration this week that - in an effort to protect its domestic players, namely Garuda and Merpati - the country would not grant any new traffic rights to foreign low-cost carriers (LCCs).

The last three months have not gone exactly as planned for Jetstar.

It has been unable to start flights to Surabaya and Jakarta in Indonesia, and Shanghai in China. It also lost out Ho Chi Minh City to rival Tiger Airways, and was forced to cancel its loss-making daily Pattaya flights.

Meanwhile, the LCC is poised to take delivery of more planes this year.

The Singapore-based airline had originally planned to have a fleet of eight Airbus 320 aircraft by the end of 2006, based on its forecast ability to fly to many more destinations than it does now.

Instead, it may have to ask the lessor of the planes, International Lease Finance Corp in Los Angeles, to find other takers for the jets.

The LCC's new chief executive officer, Ken Ryan, said in statement last week that the problem was due to Singapore's inability 'to ensure that traffic rights awarded to Jetstar Asia are actually able to be operated to countries such as China and Indonesia'.

'Jetstar Asia has therefore taken action to place the aircraft that would have operated these services elsewhere until such time as the issues are resolved or additional traffic rights become available.'

Meanwhile, it is flying its four planes to Bangkok (twice daily), Taipei (once a day) and Hong Kong (twice daily).

And come next month, Jetstar will start services to Manila.

'We have also just received approval to fly a daily service to Manila and we will commence these services shortly,' Mr Ryan said. 'Jetstar Asia is currently carrying excellent loads and is delighted with the forward bookings on all routes. The airline will continue to grow and will announce some exciting new destinations, in addition to Manila, in the near future.'

The other new destinations could include various points in Thailand and India, including Kolkata. The airline has previously said it was also eyeing a secondary airport near Mumbai, India.

Meanwhile, Jetstar officials strongly denied Australian media reports that it has been unable to secure traffic rights into Shanghai and other key destinations in the country because of the Chinese government's displeasure over its decision to begin services to Taipei before finalising negotiations for landing rights with Beijing.

'They want us to use secondary airports,' a Jetstar official told BT. 'But we have to see whether it makes economic sense to fly to some of these places.'

Besides Qantas, which has a 49 per cent stake, the other shareholders of Jetstar are Temasek Holdings, with 19 per cent, and Singaporean businessmen Tony Chew and FF Wong.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 25 Mar 2005

Tiger Airways launches service to gambling enclave of Macau

HONG KONG - Singapore-based budget carrier Tiger Airways on Friday launched flights between the Republic and the Chinese gambling enclave of Macau.

Tiger Airways, a unit of Singapore Airlines, said it will fly five times a week between Singapore and Macau, a former Portuguese colony that returned to Chinese rule in 1999.

"Tiger Airways is excited to add Macau as our new destination," said Tony Davis, the airline's chief executive. "Given we are the only service between the two vibrant cities, we hope to play our part in boosting the economy and tourism locally."

Macau is 60 kilometres west of Hong Kong and attracts thousands of Hong Kong and Chinese gamblers who have no casinos at home.

Mr Davis said in a statement that the airline will further expand its service in the region in the next two months. It will launch flights to Vietnam's Ho Chi Minh City and Hanoi and Manila, the Philippines' capital, in April and to Indonesia's Padang city in May.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

27 March 2005

Tiger Airways offers $9.98 promotional fares to 10 destinations
By Asha Popatlal, Channel NewsAsia

SINGAPORE : It looks like there has never been a better time to travel.

Hot on the heels of multiple special offers at travel fairs and leading airlines, budget carrier Tiger Airways has upped the ante.

It is offering rock bottom fares of $9.98 one-way to all the 10 cities it is flying to.

From places like Bangkok, Chiang Mai, Phuket to new destinations like Ho Chi Minh City, Hanoi, Macau and Manila.

The offer is to celebrate the completion of its first phase network expansion.

Bookings have to be made online from Monday to Friday.

The special offers are only for mid-week travel from Mondays to Thursday and the travel period is from July to October.

Meanwhile, competitor Jetstar Asia announced it will start flying daily to Manila's Ninoy Aquino International Airport from next month.

Tiger flies to Clark Airport in Manila.

Introductory fares start at $99 one way, after which fares will start from $129. - CNA

Copyright © 2005 MCN International Pte Ltd

Business Times - 31 Mar 2005

Valuair may lease bigger planes: chairman

(SINGAPORE) VALUAIR, a Singapore-based budget carrier, said it may lease larger aircraft to fly to destinations of up to eight or nine hours from the island state as it seeks to expand its route network.

The airline is currently examining twin-aisle aircraft options including Airbus SAS A300-600s, A330s and A340s, Mr Lim said. Valuair currently flies four Airbus A320 planes.

'We're doing valuations of various aircraft types and the economics for operations,' Valuair chairman Lim Chin Beng told reporters yesterday. 'But it's a very tight market' for aircraft. He didn't say when a decision will be made, or which long-distance routes the airline plans to fly.

Valuair, the first Singapore-based budget airline, currently flies to Jakarta, Bangkok, Hong Kong and Perth, Australia. The airline, which began flying in May last year, faces competition in Asia from Tiger Airways, controlled by Singapore Airlines and Jetstar Asia, operated by Australia's Qantas Airways, which are also both based in Singapore.

Valuair also plans to start flying to cities in China next month and is also interested in operating services to India, Mr Lim said. 'We need to expand faster,' he said, adding that the carrier may add A320s to its fleet. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 01 Apr 2005

Jetstar Asia to offer in-flight video on demand from June

By VEN SREENIVASAN

(SINGAPORE) Budget carrier Jetstar Asia is introducing portable video-on-demand services on its flights.

The Qantas associate has signed a memorandum of understanding with Wencor/APS, a US-based airline service provider, to provide a portable in-flight entertainment device called the digEplayer.

The service will be on all Jetstar flights to Hong Kong, Taipei and Manila from June this year.

Passengers can rent the battery-operated tray-top entertainment consoles for $10 and choose from 10 movies, eight sitcoms, 100 audio tracks and music videos.

Jetstar Asia chief executive Ken Ryan said the digEplayer had been successfully introduced in a number of airlines, and added that the units would become a new revenue source for Jetstar Asia as the low-fare carrier progressively makes new enhancements to its overall service and product offering.

'We see the introduction of digEplayer as a substantial and exciting boost to our in-flight product,' he said, adding that a complimentary disposable head set will be provided with each rented set. 'The digEplayer can be used in-flight much like a laptop computer. Our cabin crew will rent out the units after take-off and (they) will be collected back from passengers prior to a flight's arrival.'

The digEplayer contents will be updated every 60 days.

Jetstar Asia is 49 per cent owned by Qantas, and 19 per cent held by Singapore's Temasek Holdings. Businessmen Tony Chew, with 22 per cent, and FF Wong, with 10 per cent, are also major shareholders.

The airline currently flies to multiple destinations within five hours of Singapore including Taiwan, Hong Kong, Thailand and Philippines.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

April 5, 2005

When ad ideas fly

LOW-COST carriers may dangle super-cheap fares, but their advertisements are rarely entertaining or creative.

But it is a safe bet to say that Jetstar Asia's recent ads have brought a smile to many people.

The concept is simple. In one ad, for example, the copy says: Fly Jetstar Asia to Bangkok for only $28 or get half a haircut.

An accompanying small picture shows a woman with just that haircut.

Other ads mention that the amounts you pay to Taipei and Hong Kong can net you half a pair of jeans and a can of abalone respectively.

How did such inspiration come about?

This was a result of the advertising agency's creative director 'buying some fish for dinner from the supermarket and realising that for the same price, he could have gone to Hong Kong', says Mr Ken Ryan, chief executive of Jetstar Asia.

Will there be a sequel to this ad campaign? Maybe travellers can suggest what they themselves could have bought for the price of the air ticket?

All Mr Ryan will say for now is that Jetstar Asia, which recently won landing rights in Manila, is open to fresh ideas.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

07 April 2005
Low-cost carriers urged to look beyond usual choice spots
By Chua Chin Chye, Channel NewsAsia

SINGAPORE: Budget carriers in Singapore have been urged to broaden their choice of destinations and look beyond the usual choice spots.

That call came from Singapore's Transport Minister Yeo Cheow Tong.

He was at a ceremony to sign an open skies agreement with Bahrain's Transport Minister Sheikh Ali bin Khalifa Al Kahlifa.

It is Singapore's third open skies pact with a Middle Eastern country, after Qatar and the United Arab Emirates.

The Bahraini minister lost no time in inviting Singapore Airlines to resume flights to his country, saying that Bahrain has now become a regional hub for a thriving Middle East.

SIA stopped its services to Bahrain in 1988 when the entry of long-range jets allowed the carrier to fly directly from Singapore to Europe, without having to refuel midway.

As for Mr Yeo, he took the opportunity to address budget carriers which are facing problems in securing new destination rights.

Just last month, Indonesia said it was closing four cities to new budget carriers.

Mr Yeo said the authorities would do their best to help, but he urged the carriers to look at alternative destinations.

"There are still other cities in Indonesia that are available. And we have urged them to take a look at these other cities. We have told them to cast their network as large as possible, not just focus on the key capital cities or the key cities in each country," he said.

Meantime, talks for an open skies agreement between Singapore and Australia are still continuing.

"For Australia, we are just one step away from the open skies agreement... For us, the final step is really the trans-Pacific route, for SIA to be allowed to pick up passengers from Australia to fly to the US... This is the last one step, but it is the most difficult final step," Mr Yeo said.

Officials from both Singapore and Australia are expected to come up with a timeframe for further talks by the middle of this year. - CNA

Copyright © 2005 MCN International Pte Ltd

Business Times - 07 Apr 2005

S'pore urges Jakarta to open up key cities to low-cost carriers

SINGAPORE - Singapore Transport Minister Yeo Cheow Tong urged Indonesia on Thursday to reverse a ban on regional budget airlines flying to four major cities, saying increased tourism would boost economic growth.

Mr Yeo said Singaporean aviation officials had been told by their Indonesian counterparts during talks in January that the cities of Jakarta, Surabaya, Medan and Denpasar on Bali would be not be open to low-cost carriers.

'We are urging the Indonesians to reconsider, to take a look at the interests of the economy rather than seeking to protect their airlines,' Yeo told reporters after signing an open skies pact with Bahrain's Transportation Minister Sheikh Ali Bin Khalifa Al Khalifa here.

'If they are looking at creating employment, the best way to create employment is to have another million visitors into the country which the airlines will provide if they are allowed to fly.'

Mr Yeo emphasised that transport ministers of the Association of Southeast Asian Nations (Asean) had agreed to have unlimited flights between their capitals by 2008.

'So it's only a matter of time before they (Indonesians) have to open up. So we are telling the Indonesians 'why not open up earlier?'' Mr Yeo said.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 11 Apr 2005

Valuair to start service to interior Chinese provinces

HONG KONG - Singapore-based Valuair Ltd will become the first budget airline to fly to interior Chinese provinces when it begins service to the southwestern city of Chengdu in two weeks, a newspaper reported on Monday.

The airline is also planning to add flights to the southern Chinese cities of Xiamen, Guangzhou and Shenzhen, the South China Morning Post reported. The carrier currently flies to Hong Kong, Bangkok, Jakarta and the western Australia city of Perth.

Valuair chairman Lim Chin-beng was quoted as saying he plans to charge only about 10 per cent less than competitors on the China routes.

'We would be pricing very close to the major airlines because we don't want to disturb the market and the authorities,' Mr Lim told the paper.

Valuair, which started commercial flights in May, hopes the new Chengdu route will help it break even in its second year of operation, the paper said. The airline has struggled recently amid a 30-per cent decrease in tourists visiting Singapore after the Dec 26 tsunami devastated parts of the region.

But Mr Lim was quoted as saying Valuair still managed an average passenger load of more than 50 per cent despite being a few months behind its target. He said, 'When (business) gets tougher, it becomes more exciting,' the paper reported.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

April 12, 2005
Star Cruises may raise Valuair stake

KUALA LUMPUR - STAR Cruises, the world's third-largest cruise-line operator, is keen to increase its stake in Valuair if the Singapore budget carrier needs more funds to expand its business, chairman Lim Kok Thay said.

It bought about a fifth of Valuair in December to tie up with the carrier on packages to attract more of the 8.9 million tourists expected in Singapore this year.

The shares of Hong Kong-based Star Cruises, partly owned by Malaysia's Genting Berhad, also trade in Singapore.

'If management puts up a good case, and if it's for further expansion of the business, we'd certainly look into it,' Mr Lim said in a recent interview.

'We're happy to look at anything that makes us more money, and this has such a big potential,' he added.

Singapore is within six hours' flying time for more than 2.5 billion people in Asia, where the number of millionaires rose 8.4 per cent in 2003, according to a Merrill Lynch and Capgemini Group study last month.

Valuair, the first Singapore-based budget airline, needs to expand amid growing competition from low-cost carriers backed by Singapore Airlines and Qantas Airways.

'We see Star Cruises as a strategic investor and would definitely be open to having them take a larger stake,' Valuair said in an e-mail statement. 'We would also be prepared to consider investments from other value-adding strategic partners.' -- BLOOMBERG NEWS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 12 Apr 2005

We will survive, says Jetstar's new chief

By VEN SREENIVASAN

(SINGAPORE) Budget airline Jetstar Asia says rumours of its demise are greatly exaggerated. Chief executive Ken Ryan told BT that the carrier is here to stay - and will match the competition blow for blow, dollar for dollar. 'Yes, the competition is intense, the environment is difficult. But we will survive.'

Mr Ryan, who took the helm of the Qantas associate just a few weeks ago, was responding to speculation that it could be in trouble after failing to get on to key routes in China, Indonesia and Vietnam.

Speculation intensified after Qantas chief financial officer Peter Gregg said last month that things at Jetstar weren't going as well as had been hoped.

Then came reports that Jetstar would not take delivery of four new leased planes.

'What Peter said was true, and we can't walk away from that,' said Mr Ryan, who was regional general manager for South-east Asia for Qantas-British Airways about four years ago. 'We had expected to start operations to destinations in China and Indonesia.'

China refused to allow Jetstar to fly to Shanghai as planned, despite the airline having obtained air-traffic rights from the Singapore side. Then two weeks ago, Indonesia slammed the door on foreign budget airlines to protect its ailing national carrier Garuda. And Jetstar had to give up its Singapore-Pattaya run after loads dipped following the tsunami disaster.

Mr Ryan confirmed that Jetstar has asked lessor ILFC to place out three Airbus 320 aircraft the carrier was due to receive next month, and said it could place out a fourth A320 that is due to arrive several months later.

He also revealed that Jetstar has seconded many of its 40 pilots to Deccan Airlines in India for the time being.

'The eight-aircraft fleet we had planned was based on our ability to fly to Indonesia and China,' Mr Ryan said. 'The (Singapore) government has been unable to ensure we are able to use the rights allocated to us.

'China has said no to LCCs (low-cost carriers) flying into Beijing, Shanghai and Guangzhou. And Indonesia has said no to all foreign LCCs. We met all the requirements, but the policy shuts the door on us. There is nothing more we can do. It's a government-to-government issue.'

Mr Ryan said that the decision to place out aircraft makes sound business sense. 'The fact that we are letting them go doesn't contradict our growth plans,' he said. 'It is prudent practice to manage your assets. I wouldn't read too much into this.'

Jetstar's loads on existing routes remain high. 'We have been enjoying system-wide loads of over 70 per cent and forward bookings are extremely strong,' Mr Ryan said.

Jetstar now operates twice-daily flights to Hong Kong and Bangkok, and daily flights to Taipei. It will start daily flights to Manila on April 24, followed by thrice-weekly flights to Kolkata next month.

Mr Ryan said that despite the challenges, Jetstar could be profitable next year. 'We are hoping to get close to profitability by 2006,' he said. 'But it is a difficult environment where the competition is intense, oil price is rising and available rights cannot be operated.'

Jetstar has no immediate plan to impose fuel surcharges but is monitoring the situation, he said. He would not comment on the airline's fuel bill, but it is generally known that fuel makes up about a third of the expenses of Asian LCCs.

Despite recent setbacks, Jetstar is continuing to search for new routes, which Mr Ryan hinted could include Phuket and Perth.

And he couldn't resist taking a small swipe at rival Tiger Airlines and its biggest shareholder Singapore Airlines, when asked why Jetstar didn't get the rights for the lucrative Singapore-Ho Chi Minh City route.

'That's a very competitive route - between Tiger and SIA,' he joked. 'But it's a bit like competing against yourself, isn't it?'

Jetstar had bid for the route but lost out to Tiger and was instead granted the right to fly the less attractive Hanoi route.

That aside, Mr Ryan remains upbeat about Jetstar's ability to survive and handle the competition. 'Lay to rest some of the myths (about our impending demise),' he said. 'We are here to stay.'

Jetstar is 49 per cent owned by Qantas and 19 per cent by Singapore's Temasek Holdings. Businessmen Tony Chew, with 22 per cent, and FF Wong, with 10 per cent, are also major shareholders.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

12 April 2005

Singapore to hold talks with Indonesia over additional landing rights
By Jennifer Alejandaro, Channel NewsAsia

Singapore's Transport Ministry said it is in the process of arranging a meeting with its Indonesian counterpart to talk about air rights.

They will discuss a Singapore request to allow more of its discount carriers to fly to Jakarta and other key cities in Indonesia.

The ministry did not give a date for the meeting.

But a Bloomberg report quoting Indonesia's Transport Minister says it could take place on May 13.

With the recent spurt of low cost carriers in the region, competition in the sector has been intensifying.

And these carriers are not just competing for passenger numbers but also for destinations.

Indonesia is seen as an one important market.

But last month the Indonesian Transport Ministry said it would not grant additional landing rights in cities such as Jakarta, Medan, Surabaya and Denpasar to overseas low-cost airlines.

Jakarta wants to protect its national airlines - namely Garuda and Merpati - from competition.

The decision affects Tiger Airways and Jetstar Asia and will also hurt plans by AWAIR - the Indonesian arm of Air Asia - to fly between Jakarta and Singapore.

Sngapore's civil aviation authorities said they could not proceed with AWAIR's application to fly to the island because of the restriction by Indonesia.

Last week, Transport Minister Yeo Cheow Tong said he hoped that Indonesia would review the new ruling.

The Bloomberg report quoted his Indonesian counterpart as saying that Jakarta may consider giving new licenses if overseas budget air carriers fly to smaller cities that are not served by international airlines.

Valuair which is already flying to Jakarta told Channel NewsAsia it would be interested in flying to more destinations in Indonesia in the future. - CNA

Copyright © 2005 MCN International Pte Ltd

13 April 2005

Valuair becomes first budget carrier to fly from Singapore to China

SINGAPORE : Valuair will next week become the first Singapore-based budget carrier to begin flying into China when it begins a service to the Sichuan capital of Chengdu, the airline said.

Valuair will offer a one-month promotional fare for a return flight of 442 Singapore dollars (270 US), including taxes, at least 15 percent cheaper than its established rivals.

Singapore Airlines unit SilkAir and Air China are currently offering promotional return tickets to Chengdu for 520 dollars and 555 dollars respectively, inclusive of taxes, although their regular fares are generally over 700 dollars.

Valuair, which began operations in May last year and already flies to Bangkok, Hong Kong, Perth and Jakarta, is trying to establish itself as Singapore's "second international airline".

It has positioned itself in the regional aviation market between the ultra-cheap budget airlines and the major carriers, with its flights still coming with light meals, assigned seating, leather seats and on-board service.

Valuair said it would announce a sixth destination within days.

Two other budget carriers, Tiger Airways and Jetstar Asia, are also based in Singapore, while the Thai arm of Malaysia's AirAsia operates a service between the city-state and Bangkok.

Valuair's Singapore-Chengdu flight takes about four and a half hours and the service will operate four times a week.- AFP

Copyright © 2005 MCN International Pte Ltd

ohh... budget airlines are very active this year huh.... it was nice to see two budget airlines to fly here in Manila from Singapore.... we now have more choices in going there... :D

April 14, 2005
Valuair CEO makes surprise exit
He is the second budget carrier chief here to quit in less than six months

By Nicholas Fang
Transport Correspondent

ANOTHER boss of a budget airline has quit out of the blue.

Valuair chief executive officer (CEO) Sim Kay Wee resigned abruptly on Tuesday and did not turn up for work yesterday.

His surprise exit comes less than six months after Tiger Airways CEO Patrick Gan stepped down after just eight months on the job.

Valuair said yesterday that Mr Sim, 55, had resigned because of personal reasons.

Chairman Lim Chin Beng will take over the controls for the time being.

Mr Sim told The Straits Times in a phone interview yesterday that he was taking a short period of leave and would be returning to work before his resignation takes effect next Friday.

He said it was too early to say what he would be doing following his resignation, or even if he would stay within the aviation industry.

The industry veteran declined to comment on the hot topic of why he resigned.

Some industry watchers said there had been rumours of tension among Valuair's top management recently.

Mr Sim became CEO of Valuair last August after retiring from his position at flag-carrier Singapore Airlines (SIA) where he was senior vice-president for cabin crew.

Valuair, which started operations last May, said in a statement yesterday: 'Valu- air's management would like to take this opportunity to thank Kay Wee for his leadership and contribution to Valu- air.

'We wish him all the success in his future endeavours.'

Mr Sim had previously served under Mr Lim at SIA. Mr Lim retired as deputy chairman of SIA in 1996.

Leadership changes seem to be increasingly common in the low-cost carrier industry, with Tiger Airways having experienced three CEOs since taking to the skies last September.

Ryanair veteran Charlie Clifton stood in as Tiger's CEO before Mr Gan took over.

Following Mr Gan's departure, Tiger appointed industry veteran Tony Davis as its president and CEO.

News of Mr Sim's resignation comes at a hectic time for Valuair, which announced this week that it will become the first Singapore-based budget carrier to begin flying into China when it starts a service to Chengdu next week.

Competition in the budget carrier market is hotting up.

Valuair is up against SIA affiliate Tiger Airways and Qantas Airways' Jetstar Asia - both of which are also based in Singapore - as well as Malaysia's AirAsia.

And if that is not enough, a combination of regulatory hurdles, protectionism, predatory pricing, terrorism and natural disasters has clouded the growth of regional budget carriers over the past two years.

Valuair had said earlier that it was aiming for a possible public listing in two years' time to raise funds for further expansion.

Mr Sim had said then that the airline was on track to break even by March next year.

CALLING IT A DAY

Mr Sim, who apparently resigned for personal reasons, says it is too early to tell what he will be doing next or even whether he will remain in the aviation industry

Copyright © 2005 Singapore Press Holdings. All rights reserved

Business Times - 20 Apr 2005

Valuair adds Xiamen to network; Tiger Airways slashes prices

SINGAPORE - Two of Singapore's low-cost carriers upped the ante in the region's cutthroat budget airline market on Wednesday, with Valuair announcing its second China destination and Tiger Airways slashing prices to US$6.

Valuair said in a statement it would begin flying to Xiamen in south-eastern China from Monday, its second destination in the mainland after opening a route to Chengdu earlier this week.

Meanwhile, Tiger Airways - an offshoot of Singapore Airlines - said it would offer one-way tickets to any of its 10 destinations for S$9.98 from Thursday until the end of June, the peak school holiday travel season. Current fares range up to about 10 times higher.

Observers say both airlines are trying to take advantage of the upcoming summer holidays and Singaporeans' affinity for travel overseas, especially during school breaks.

'I'm confident, with the value we provide, that we'll not only be carrying high volume of Singaporeans wanting to visit Xiamen either for business or pleasure, but also attracting a lot of tourists into Singapore,' said Valuair chairman Lim Chin Beng in a statement.

Singapore's aviation authorities have embraced the growth of low-cost fliers and are building a passenger terminal at Changi Airport specifically for discount airlines that is set to open in 2006.

Qantas-backed Jetstar Asia is the other budget airline based in the Republic.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

21 April 2005

Asia presents substantial opportunities for low cost carriers: Tiger Airways

SINGAPORE: The competition in the airline industry may be intensifying but Tiger Airways believes that there are substantial opportunities for low cost carriers in the region.

Its chief executive Tony Davis made that comment in an interview with the Center for Asia Pacific Aviation.

He views Asia as an emerging market in which budget airlines can attract customers who traditionally have not had the option to travel.

But Mr Davis noted that consolidation is inevitable - given rising oil prices and pilot recruitment pressure.

Tiger was launched in August last year - and is one of three low cost carriers currently based in Singapore. - CNA /dt

Copyright © 2005 MCN International Pte Ltd

April 26, 2005

Budget airlines target China, India
Low-cost carriers in S-E Asia are moving fast to tap great numbers of potential travellers

SINGAPORE-based Valuair has launched flights to a second destination in China, while low-cost carrier Thai AirAsia has embarked on its maiden flight into mainland China, with an inaugural flight from Bangkok to Xiamen this week.

The new routes underscore where the region's budget airline industry is going.

After mushrooming across South-east Asia in the past year, discount carriers are spreading to tap great numbers of potential passengers in China and India.

There, low-cost airlines based in Singapore, Malaysia and Thailand will compete with domestic budget carriers cropping up in both countries.

Some analysts believe carriers that do not have a China-oriented business strategy should formulate one soon, or risk missing the potentially lucrative market completely.

Currently only 5.8 per cent of the Chinese people travel but the rising disposable income and the emerging urban middle class should have profound effects, with tourism forecast to grow up to 10 per cent annually, says a report in the Bangkok Post.

About 100 million passengers travel by air on domestic routes and 20 million on international flights a year in China, according to current industry estimates.

Both Boeing and Airbus, the world's two largest aircraft producers, agree that China will undoubtedly be the prime driver of growth in the world's aviation industry.

They forecast that the domestic passenger traffic and air cargo alone are set to increase by an average of about 8 per cent and 10 per cent a year for the next 20 years.

'China is definitely pulling Asia-Pacific's air traffic along,' says Mr Andrew Whittaker, vice-president for transport in Asia Pacific for Unisys, the US-based information technology service provider.

'So all of the carriers, both passengers and cargo airlines, need to have a Chinese strategy if they want to continue to survive in the Asia-Pacific marketplace.'

Many international carriers have already begun to tap the Chinese opportunities, particularly the 17 major international airlines based in Asia-Pacific.

Now the regional budget airlines are showing interest.

Last week, Valuair unveiled plans to start four-weekly flights to Xiamen.

'Xiamen is one of China's first special economic zones and is now a thriving city with a brand new airport - the fourth largest in China,' said Valuair chairman Lim Chin Beng, according to The Business Times.

Return tickets between Singapore and Xiamen will be priced at $360, a fraction of the fares charged by full service network airlines.

Malaysia's AirAsia too is upbeat.

AirAsia's next big push is China, the airline's CEO, Mr Tony Fernandes, told The Edge newspaper in Malaysia.

'We are already operating to Xiamen... we want to be in Guangzhou, Shenzhen, Kunming, Chongqing, Guilin, Nanning, Wuhan and secondary cities like that over the next few months.'

India's government has also opened its aviation sector to competition.

Already the success of India's first discount airline, Air Deccan, has lured new entrants.

Air-India, a national carrier, launched its low-cost subsidiary Air-India Express this year with routes from Delhi, Mumbai, Cochin and Trivandrum to the Persian Gulf.

In May, two more budget carriers - Kingfisher Airlines and SpiceJet - plan to start operations.

For the cost-conscious traveller, this expansion is creating a network of cheap international connections that make flying around Asia less costly than ever.

'It's happened extraordinarily quickly,' said Mr Peter Harbison, managing director of the Centre for Asia-Pacific Aviation in Sydney, according to a report in the New York Times.

Only a year ago, he said, 'there was a majority feeling that these carriers would not survive'.

Back then, many industry observers said the model used by Ryanair that has been followed by other budget carriers in Europe and in the United States would not work across a region as diverse as Asia.

The population was too poor, they argued, and the list of potential routes was limited by thorny international agreements.

They were wrong, says the report.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 27 Apr 2005

Jetstar Asia 3rd budget carrier to fly to Philippines

(MANILA) Jetstar Asia Airways, the low-budget carrier operated by Australia's Qantas Airways Ltd, will become the third discount airline to operate in the Philippines, servicing the Manila-Singapore route, the company said yesterday.

Jetstar Asia chief executive Ken Ryan said he expects passenger volume to gain 20 per cent from its operations in the Philippines. Apart from its once-daily Manila flights, Jetstar Asia also connects Singapore with twice-daily flights to Hong Kong and Bangkok and once-a-day flights to Taipei.

'All indications show that the Manila route will be very strong,' Mr Ryan told reporters on the eve of the inaugural flight on an Airbus A320, one of the airline's four aircraft.

Mr Ryan said the company is currently flying at more than 70 per cent passenger capacity during peak season and at around 60 per cent during off-peak periods.

Jetstar Asia is the first low-cost airline that has received the right to fly to Manila's Ninoy Aquino International Airport. The two other budget carriers, Tiger Airways - an offshoot of Singapore Airlines - and Malaysia's AirAsia use Clark airport, north of Manila.

Jetstar Asia, which started operating in December, is 49 per cent owned by Qantas, 22 per cent by Singaporean businessman Tony Chew, 19 per cent by Temasek Holdings and 10 per cent by another Singaporean businessman F F Wong. - AP

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Tiger Air seeking flights to India, China

28 Apr 05



(JAKARTA) Tiger Airways Pte, Singapore Airlines Ltd's budget carrier, is seeking approval to start flights to India and China to tap growing travel demand in the world's two most populous nations, chief executive Tony Davis said.


Tiger Airways, which operates four Airbus A320 planes, operates flights to 10 cities in six countries including Singapore. The carrier will begin flying to Indonesia next month with a flight to Padang, the capital of West Sumatra province.

'The airline has applied for rights to fly to India,' Mr Davis told reporters yesterday in Jakarta. It is also looking at destinations in China. Tiger Airways plans to expand its fleet in the next 12 months to support more routes, he added.

Budget carriers such as Tiger Airways, Jetstar Asia and Valuair Ltd are expanding fleets and flying to more destinations in South-east Asia. Last year, low-cost airlines accounted for 7 per cent of passenger flights at Singapore's Changi Airport.

Passenger traffic in the region is forecast to grow an average 6.1 per cent a year until 2023, compared with a global average of 5.2 per cent, according to Boeing Co. - Bloomberg

28 April 2005

Tiger Airways may team up with other carriers to spread its wings
By Loh Kim Chin, Channel NewsAsia

SINGAPORE: Tiger Airways is mulling joint ventures with Asian carriers to speed up its regional market penetration.

The joint ventures will allow the budget carrier to get around regulatory restrictions on the operations of foreign carriers.

Tiger Airway's Chief Executive Officer Tony Davis also said this route would allow the airline to fast track its regional network development.

He added that the carrier had been approached by a number of airlines and potential partners in the region.

He revealed that the governments of Indonesia and Singapore were in talks to resolve the dispute over landing rights.

Earlier this year, Indonesia banned foreign low-cost carriers from flying to four major cities - Jakarta, Bali, Medan and Surabaya - in a bid to protect its national airlines.

The move also affected plans by the Indonesian budget carrier, AWAIR, to fly to Singapore. - CNA/ir

Copyright © 2005 MCN International Pte Ltd

Business Times - 30 Apr 2005

Big jump in March tourists; LCCs seen providing a boost

MARCH yielded a bumper crop of tourists for Singapore. A total of 732,359 visitors arrived in Singapore, a figure 16.9 per cent up on March 2004.

It was easily the highest year-on-year growth so far this year, far outstripping February's 6 per cent growth and January's 2.3 per cent.

The influx came largely from Indonesia, which represented the top visitor-generating market last month, with 151,000 arrivals. The other top five markets were the UK, China, Japan and Malaysia. Together, these five accounted for 49 per cent of total visitor arrivals last month.

Another factor driving the good results was the double-digit growth in arrivals from some of the top 13 visitor-generating markets. They were Hong Kong, which rose 67 per cent; India, with a 50 per cent increase; Thailand, rising 34 per cent; and the Philippines, 28 per cent up.

Visitor arrivals from Singapore's other top markets - Japan and China - slid by 2 per cent each. The South Koreans are also giving Singapore a miss - visits from there fell by 9 per cent.

It is not just more visitors - each one is spending more. Singapore had an estimated $867 million in tourism receipts last month, a 19 per cent increase over March last year.

The higher visitor numbers meant good news on the hotel occupancy front too. Room revenue for Singapore hotels rose by 17.6 per cent to $100 million last month over March 2004. The increase was powered by a rise in the average occupancy rate, which was about 84 per cent last month, and an increase in the average room rate by 7.4 per cent to $130.

The better figures may also have been fuelled by low-cost carriers (LCCs). Tiger Airways, for instance, is now flying more people into Singapore than it does out. Operating to new destinations, the SIA associate said yesterday it has carried 1,000 more inbound travellers than outbound travellers this month.

'This marks a milestone as it means that our new routes from Vietnam, Macau and the Philippines are attracting lots of visitors to Singapore,' Tiger's CEO Tony Davis said. 'What's also interesting is that the number of inbound tickets we've sold to date for June and July exceeds outbound tickets by 20-50 per cent.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 03 May 2005

Low cost carriers: The flight so far

After just one year, budget airlines have revolutionised aviation in the region and changed perceptions about air travel

By VEN SREENIVASAN

THIS week marks the first anniversary of the launch of services by Singapore's first homegrown low cost carrier. It was a year ago, when Valuair took to the skies. Within a space of another 6 months, Tiger Airways and JetStar Asia started services.

Meanwhile, the region has seen the proliferation of several LCC players. So perhaps it is time to take stock of the state of the industry. A lot has changed in the past one year.

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The emergence of LCCs has boosted air travel, hammered down the price of air tickets, squeezed yields in the industry, put pressure on struggling Asian network carriers, revolutionised labour-management relations in the aviation industry and challenged the existing hubs across the Asia-Pacific area.

Indeed, LCCs have revolutionised aviation in the region and changed the way people here think about air travel.

Today, travellers can fly from Changi airport to Bangkok for less than the price of cab fare from Changi airport to Yishun. In fact, as Martin Symes of online discount ticket portal Zuji pointed out, ticket prices have become the subject of dinner-time conversations everywhere.

Sizeable players

Yet, changes have not come as fast as had been anticipated. Early last year, many industry experts attending the Low Cost Carrier Symposium here organised by the Asia Pacific Centre for Aviation predicted that there would be between 20 and 30 new LCC operators in the Asia-Pacific.

However, today there are only about 10 established names in this region of some 550 million people. In contrast, Western Europe, with about the same population, has some 50 LCC operators.

Besides notables like AirAsia, Valuair, Tiger Airways, JetStar Asia, Nok Air, 1-2-Go, Lion Air and Cebu Pacific, there are no other sizeable LCC players around the region. Even these notables are feeling the pressure on yields and profits.

The problem is that LCCs in Asia Pacific operate in very different circumstances compared to their US or European cousins.

For one thing, point to point flights tend to be longer, averaging four hours, compared to 2 hours in Europe and the US. This has obvious implication on utilisation rates, turnaround times and ultimately operating costs.

Also, the skies over Asia are much less free. In the US, LCCs like Southwest thrived by serving a burgeoning domestic market. Ditto over the skies of the European Union.

On the other hand, Asian LCCs have to depend on bilateral agreements and meet strict regulatory requirements on most routes. Singapore and Thailand have inked a free skies deal, which has naturally seen Singapore-based LCCs Valuair, Tiger Airways and JetStar launch flights to Thai destinations early.

But after these easy pickings, they face an uphill task getting lucrative routes elsewhere around the region. The protective inclinations of some governments such as Indonesia (which has barred all foreign LCCs) add to the problem.

The problems recently faced by JetStar Asia demonstrate this stark reality.

Unable to secure new routes quickly enough, the Qantas associate has been forced to delay taking delivery of new jets this year.

Infrastructure - or rather, the lack of it - is another hurdle. Not having access to cheaper secondary airports, LCCs have been forced to fly into major metropolitan airports, incurring the same fees and charges as their incumbent full service competitors.

And these full service carriers are able and willing to give the LCCs a run for their money.

Just as Valuair was preparing to take off in May last year, Singapore Airlines started offering return fares to Bangkok for $168 and to Hong Kong for $368, against Valuair's promotional fares of $138 and $300. And Cathay matched Valuair's $300 return price to Hong Kong, while Indonesian carrier Garuda offered cut-rate $283 return fares to the territory.

Even now, SIA and Qantas are offering fares which match those offered by Valuair to Perth.

'Any new carrier entering this market will do so at their own risk,' predicted Peter Harbison, managing director of the Centre for Asia-Pacific Aviation. 'There will be intense irrational pricing to kill upstarts.'

His words have proven to be prophetic. With astute yield and capacity management techniques, full service carriers with deep pockets here are well positioned to take on the LCCs on the latters' own terms.

And they will continue to do so as long as LCCs have no legislated protection against predatory pricing. Many in the industry have not forgotten how in the 1990s, Qantas and Ansett felt so threatened that they slashed prices to a level where it was impossible for competitors like Compass Airlines to operate in Australia.

The success of Asia's growing LCC phenomenon depends on the relaxation of air rights, better and more affordable airport infrastructure and protection against capacity dumping by incumbents.

As HSBC noted in a paper not long ago, budget operators in the region have fewer cost advantages and greater revenue disadvantages than their European peers such as Ryanair. Only time will tell whether this region will truly have a vibrant and freewheeling LCC industry.

Meanwhile, the last lucrative frontier for regional LCCs are India and China. As businessman Wong Fong Fui, a shareholder in JetStar Asia noted recently: ''If the market grows in China or in India, then all will survive. If not, there will be a bloodbath.'

Indeed, many of the region's LCCs are eyeing these two vast markets as they slowly open up their skies. But these countries are seeing a proliferation of their own domestic LCCs, and it remains to be seen whether their governments will succumb to inherent protective instincts.

But it is not bad news everywhere. Tiger Airways, for example, is now carrying more passengers inbound than outbound from Singapore. This is a first for any Singapore-based LCC.

And it vindicates the long-held claim by LCC operators that theirs is a business which truly supports regional tourism.

It also underscores their important role as catalysts for regional integration - at least for the masses.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved

May 5, 2005
Valuair: Bumpy flight a year after take-off
1st budget airline here hit by rising fuel cost, price wars and entry of more low-cost carriers

By Krist Boo

AS IT celebrates its first birthday today, the airline that kicked off low-cost air travel with much fanfare in Singapore says the skies don't look quite as friendly as they did a year ago.

In fact, unexpected turbulence in the industry has made the past year a struggle, admits Valuair chairman Lim Chin Beng, 71.

Valuair took off on its maiden flight to Bangkok at about noon on this day a year ago.

Since then, it has been at pains to position itself as a mid-cost rather than a budget airline, providing basic amenities, like meals, assigned seating and baggage allowances, that budget carriers usually sacrifice in the name of rock-bottom fares.

Budget carrier or not, Valuair has not been spared the three whammies that, to varying degrees, have also hurt its main Singapore-based rivals: Jetstar Asia and Tiger Airways.

The first and biggest problem has been surging fuel costs, which shot from an already painful US$58 (S$96) a barrel last November to a record high of US$78 last month.

Since its launch, Valuair has seen its fuel spending shoot up by 75 per cent. If that wasn't enough, full-service carriers attacked them with a merciless round of fare slashing.

When Valuair launched promotional fares of $138 to Bangkok and $300 to Hong Kong last May, Singapore Airlines virtually matched its offers, with $168 and $368 respectively.

Other full-service airlines such as Hong Kong's Cathay Pacific and Indonesian carrier Garuda also joined in the fray.

Valuair had no choice but to respond. It now sells its cheapest return tickets to Bangkok for $119 and to Hong Kong for $219.

Mr Lim said: 'When we planned this airline, there did not appear to be any other budget carriers.' That changed very quickly. Now, besides the three budget carriers based here, two others also pass through Changi.

'If there were only one or two, the full-service carriers would have been more tolerant. But suddenly there were so many. The full-service carriers felt threatened.'

In the past year, Valuair has sold about 60 per cent of seats on its four Airbus 320s. But like Tiger and Jetstar Asia, it is bleeding red ink.

True, it had not expected to break even in the first year, but now the airline cannot even predict when this might happen.

'It depends on fuel prices, which is beyond our control,' Mr Lim said.

Aviation observers have predicted that Valuair would be the first to fold in this tough environment. Of the three budget carriers based here, Valuair has the weakest backing.

That perception of vulnerability was not enhanced by the abrupt resignation last month of 55-year-old chief executive Sim Kay Wee, reportedly over 'tension' within its management.

Mr Lim, now interim CEO, said: 'As far as deep pockets are concerned, we have a big disadvantage. Everybody knows that.'

Star Cruises owns 20 per cent of its shares, valued at over $10 million. Other shareholders include a group of companies and local individuals, including Mr Lim himself.

In contrast, Tiger Airways has backers including Singapore Airlines and Temasek Holdings, while Jetstar Asia counts Qantas and also Temasek among its investors.

No injection of funds is in the pipeline for Valuair yet, though the airline is actively seeking investors.

It is also planning to expand its current network of six cities to airports in India, Myanmar, Vietnam, Cambodia and Macau. If fuel prices slide, it is not ruling out acquiring wide-bodied aircraft, such as the Boeing 777, to ply the Australian east coast, Japan and South Korea.

It now flies to Jakarta, Hong Kong, Perth and the Chinese cities of Chengdu and Xiamen.

Hopes of an initial public offering (IPO) by 2007 have also not been abandoned, said Mr Lim.

His birthday wish for the airline: 'That we will be able to grow and be profitable so that we can go for an IPO.'

Making the Tiger roar

'Even in one year, airlines such as Tiger Airways have transformed people's expectations and travel habits. There are now short trips, shopping trips, beach trips.

Competition is about offering the best product at the lowest possible price. The companies that are unable to compete effectively - ultimately that's their problem.

You have to be a very brave airline to enter Singapore - what would be the most fiercely contested low-cost carrier market in Asia.

Whether everyone will survive in Singapore? Clearly I am very confident Tiger Airways will survive, but I can't speak for my competitors. '

MR TONY DAVIS, chief executive of Tiger Airways, which started flights last September

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 05 May 2005

Valuair eyes foray into medium-haul market

Head-on competition with full-service carriers if it flies to eastern Australia

By VEN SREENIVASAN

(SINGAPORE) Budget carrier Valuair is looking at spreading its wings to the medium-haul market using wide-bodied aircraft.

http://business-times.asia1.com.sg/mnt/media/image/launched/2005-05-05/050505_vsvalu5_pg1.gif

Chairman and founder Lim Chin Beng says the company is 'seriously studying' possible services to eastern Australia, which could include the major cities of Sydney, Melbourne and Brisbane.

This would put Valuair in head-on competition with full-service carriers such as Singapore Airlines, Qantas, British Airways, Emirates and others.

'We have been looking into the possibility of using wide-bodied planes like the Airbus 330, Airbus 340 or the Boeing 777 for such medium-haul routes,' Mr Lim told BT. Valuair could start the service initially with 'two or three' leased planes, he said.

Besides eastern Australia, medium-haul flights could conceivably take Valuair to the far reaches of the Indian sub-continent and northern China.

And if indeed Valuair does go into medium haul, it would be the first discount carrier to go beyond the four-hour radius that is typical of the breed.

Mr Lim stressed that any final decision on entering the medium-haul market will depend on fuel prices receding. 'If fuel remains at current levels, it will be too expensive for us to operate wide-bodied aircraft,' he said. 'We can only do this if oil falls below US$40 per barrel.'

The price of oil has leapt more than 50 per cent this year, with Brent crude hovering around US$50. Fuel accounts for 26 per cent of Valuair's total costs.

Mr Lim hinted that medium-haul flights would target business travellers. 'They already comprise about 40 per cent of our customers,' he said. 'Our model is based on providing businessmen with value travel - but with dignity.'

Unlike its no-frills rivals, Valuair offers a 20kg baggage allowance, simple meals and allocated seats with a 34-inch pitch.

Given the carrier's popularity with business travellers, Mr Lim envisages that wide-bodied Valuair jets could have relatively more business class seats than full-service airlines. But it would charge significantly less for them.

'What do businessmen want? Champagne, caviar and kebaya-clad women? Or comfort, up-to-date on-board Internet connectivity and friendly service?' Mr Lim asked.

Valuair aims to provide mid-tier products for value-conscious travellers. 'In every consumer product except airlines there is a whole range to choose from,' he said. 'Now that this industry is opening up, I don't see why we should be any different from other products such as automobiles or watches. We should also be able to offer consumers a choice.'

Mr Lim said Valuair's loads averaged 60 per cent over the past 12 months, and that prior to the December 26, 2004 tsunami the average load factor was around 80 per cent.

The airline - which tomorrow celebrates the anniversary of its first flight - operates four leased Airbus A320s on its routes to Hong Kong, Bangkok, Jakarta, Perth, Xiamen and Chengdu. It is looking at leasing two more aircraft within 12 months to cater for network growth.

One of its more popular offerings is a 'fly-cruise' package with Star Cruises. The world's third-largest cruise operator controls 20 per cent of Valuair after it injected about US$15 million earlier this year.

Star chairman Lim Kok Thay was quoted recently as saying the company is keen on lifting its stake in Valuair when the carrier needs funds to expand. In fact, Star's participation and funding would be critical to Valuair's plans to get into the medium-haul market.

Meanwhile, Valuair says it has received an overwhelming response to its 'buy one-get one free' anniversary ticket deal. When BT visited its ticketing office at Toa Payoh Hub on Tuesday, people were queueing to buy.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 05 May 2005

Time to review air pact

CONDITIONS may be right for Singapore-Malaysia air links to finally come under serious review. Low cost carriers (LCCs) such as Tiger Airways, Valuair, AirAsia and Jetstar Asia would love to get a slice of the potentially huge market for cheap flights between Changi and destinations in Malaysia. And no single route is more keenly sought after than the highly lucrative - but totally unavailable - 45-minute hop between Singapore and Kuala Lumpur. This is the region's fourth busiest route, carrying an estimated eight million passengers last year.

Singapore Airlines and Malaysia Airlines service this route almost as a duopoly. The two national carriers control eight out of 10 available flights a week between the two destinations, with the remainder served by carriers such as Air India and Japan Airlines, exercising their 5th Freedom rights to pick up passengers at one foreign point and put them down in another foreign point as part of continuous operation also serving the airline's homeland. Having just two big players has meant high fares: a round trip between Changi and Sepang costs over $300, double the fare between Changi and Bangkok's Don Muang via an LCC. In fact, it is actually cheaper to fly from Singapore to KL via Bangkok with an LCC. This is an anachronism at a time when the regional aviation scene is undergoing rapid changes.

There are currently about a dozen LCC players operating in Thailand, the Philippines, Malaysia, Indonesia and Singapore. There could be as many as 30 LCC start-ups emerging in this region in the next few years. And LCCs already account for about 7 per cent of the passenger traffic at Changi. It is triple this number in KL, the headquarters of the region's biggest LCC - AirAsia. Despite the reluctance of some governments in the region to open up their skies to LCCs, low cost air travel is here to stay. The advent of LCCs has created a phenomenon which industry insiders call the 'commoditisation' of air travel. In short, supply of new service providers is boosting demand by driving down prices. Suddenly, flying has become an affordable mode of travel for many in this region.

Meanwhile, the three decades-old air services agreement between Malaysia and Singapore is stuck in a time-warp. While the two national carriers control the 300 km Singapore-KL route, 12 airlines fly between Singapore and Bangkok and 13 fly the Singapore-Jakarta route. There are about 300 weekly flights between Singapore and Hong Kong, Bangkok and Jakarta, compared to just 184 between Singapore and KL.

Asean is edging towards limited open skies by 2015. But some countries have already 'fast-tracked' this via bilateral agreements. The most prominent example is the Singapore-Thailand free-skies deal. Given their proximity, and economic and cultural links - and the steady warming of ties between them - a review of the air services agreement between Malaysia and Singapore is long overdue. Thailand should also be a partner in a new pact which would free up the skies above a fifth of the region's 550 million people. And it would also act as a strong catalyst to speed up an Asean open skies treaty.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 06 May 2005

Tiger to add two weekly flights to the Philippines

By VEN SREENIVASAN

(SINGAPORE) Tiger Airways is increasing its services to the Philippines to five flights a week from the current three in response to strong demand, the low-cost carrier said.

The additonal flights will start on June 6.

The Singapore Airlines associate started flights to Clark Field, about an hour's drive north of Manila, on April 5. The airport was part of the US air base prior to the American troop pullout over a decade ago.

Tony Davis, Tiger's chief executive, said seats were fully booked up until June and there was strong forward booking until the end of July. He added that the additional flights were in response to requests from officials at Clark Development Corp.

Tiger is selling tickets for travel between Changi and Clark from as low as $14.98, compared to around $400 charged by full-service carriers like Philippine Airlines.

But it also competes with rival Singapore-based budget carrier Jetstar Asia, which flies daily directly to Manila's Ninoy Aquino International Airport. Then there is Malaysia's AirAsia, which also flies to Clark.

Besides the holiday traffic, both Tiger and Jetstar have also been eyeing a significant captive market comprising some 100,000 Filipinos living in Singapore. Many Filipinos also use Changi airport as a transit point to third countries and other regions.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

08 May 2005

Asia's low-cost airlines facing big challenges after year of strong growth

SINGAPORE : Asia's low-cost carriers are facing big challenges despite a tremendous year of growth as their established premium rivals sharply lower their fares in response to the competition, industry analysts said.

Budget airlines will find it increasingly difficult to rely on just cheap tickets to entice travellers now that full-service carriers have also slashed fares on the same routes without compromising in-flight service, they said.

"It's never been a better time to travel," said Andrew Herdman, director-general of the Association of Asia Pacific Airlines in Kuala Lumpur.

"Established carriers have been driving up their cost efficiencies, improving their performance and the cost differentials between the established carriers and the new entrants are narrowing."

Andrew Drysdale, the regional vice president of the International Air Transport Association, agreed that the low-cost airlines were coming under sustained pressure.

"They are coming up against some of the best airlines in the world and profitable airlines so it will be tough for them," he said.

Consumers in Asia, home to some of the world's most profitable carriers such as Singapore Airlines (SIA) and Hong Kong's Cathay Pacific, have seen fares tumble dramatically over the past year.

For example, recent advertisements placed by SIA in the local papers here show the carrier charging promotional fares to some of the region's popular destinations that are comparable to its budget rivals.

An economy class two-way ticket to Jakarta on SIA, with the condition that there must be a minimum of two passengers, now costs 128 Singapore dollars. The same trip in March 2004 would have set one back by more than 500 dollars.

Valuair, Singapore's first budget carrier which began operations on May 5 last year, charges 149 dollars for a round-trip to the Indonesian capital on condition that the journey is completed within seven days.

SIA's regional wing, SilkAir, also announced this week a similar round of heavy promotional discounts to 12 destinations.

Drysdale said another hurdle that could hold back budget carriers from expanding their reach is that Asia's skies are still highly regulated, which means they need to acquire air rights before they can fly a route.

This is unlike the environment in Europe or the United States.

"They have issues of air rights which needs to be overcome ... it needs to be understood that air rights are in fact trade agreements between governments and these governments will trade those agreements," he said.

Singapore, which is investing heavily to promote the city-state as a regional hub for budget carriers, has also listed Asia's regulatory environment as one obstacle facing low-cost airlines.

"While some countries, such as China, Thailand and Brunei have liberalised their aviation markets, most Asian countries are still very protective of their air rights," Transport Minister Yeo Cheow Tong said last week.

"Some prefer to protect their national airlines, foregoing the benefits that increased air travel and tourism can bring to their national economies.

"Others are concerned about the new dimension of competition that LCCs (low cost carriers) could bring to their national carriers."

Of the leading regional budget carriers, Andrew Miller, chief executive officer for consulting at the Sydney-based Centre for Asia Pacific Aviation, said Malaysia's AirAsia looks to be the strongest.

Miller said its founder, Tony Fernandes, recognised the potential of the market earlier than anyone else and has been one of the industry's most creative figures.

"He (Fernandes) has two years ahead of the market and he has been very inventive ... he does stand out in terms of the speed which he has grown the market," Miller said.

In February, AirAsia announced its three months to December net profit rose to 12 million US dollars from 2.8 million due to a strong pickup in demand.

In Singapore, Valuair, Tiger Airways and Jetstar Asia now account for seven percent of all flights at Changi international airport, despite being in the air for barely a year.

Transport Minister Yeo described their growth as "phenomenal", pointing out there are now 175 low-cost flights from Singapore each week servicing 15 destinations, up from 70 weekly flights to six cities six months ago.

However the Association of Asia Pacific Airlines' Herdman said the budget airline industry will inevitably have some failures as they meet the challenges, despite the year of strong growth.

"We just have to see how it evolves but in Europe there have been failures ... that's just the market working, that's what happens in other industries as well," he said.- AFP/ir

Copyright © 2005 Agence France Presse. All rights reserved.

Valuair flight to Hongkong......:D

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Seems like Tiger has most routes now......:yes:

Business Times - 18 May 2005

Tiger Airways flies to Padang, Indonesia

SINGAPORE - Singapore low-cost carrier Tiger Airways said on Wednesday it will start flying to Padang in Indonesia's West Sumatra province from Thursday.

Tiger Airways said it will initially have three flights a week to Padang, a city of around 800,000 people and whose beaches are reputed to be among the best in Asia for surfing.

The carrier, which is 49-per cent owned by Singapore Airlines, flies from Singapore to Macau and other cities in Thailand, Vietnam, the Philippines and Indonesia.

Promotional prices for a one-way ticket will start at around $15 (US$9) excluding taxes and other charges.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

This story was printed from TODAYonline

'Forced' to slash airfares

Full-service airlines have to do so because of budget carriers: Jetstar Asia CEO

Thursday • May 19, 2005

Ansley Ng
ansley@newstoday.com.sg

FULL-service airlines have slashed their fares by more than five times in some promotions of late. But don't be fooled by these attractive prices, Jetstar Asia's chief executive officer Ken Ryan warned travellers in an interview with Today.

These airfares would not be there if there were no budget airlines in the market, he said pointedly.

"(Full service airlines) have never been providers of low fares … They are forced to; they don't do it by choice. All you have to do is look at the routes that we fly on and see what the full service fares are and compare that to routes that low-cost carriers don't fly. And you see that the fares are double or triple," he said.

In March, Singapore Airlines (SIA) announced promotional $98 airfares to several locations — including Hanoi, Hong Kong and Perth — in a move that many saw as a confrontation with budget airlines. A normal SIA return air ticket to any of the above destinations could easily cost more than $500.

While he acknowledged that many travellers are loyal only to low fares, he warned: "The travelling public should be under no misapprehension and have to be careful that full-service airline activities do not make life so untenable for the new entrants that they are forced off the routes. And the fares go back to being where they were before."

The former regional general manager for Qantas in Victoria and Tasmania in Australia also countered the perception that low-cost carriers provide "cheap and nasty" low quality product.

"Carriers such as ourselves are still new so we are still building loyalty and the travelling public are still gaining trust," he said.

Qantas holds a 49-per-cent stake in Jetstar Asia. The other stakeholders are Temasek Holdings, which owns 19 per cent, and Singapore businessmen Tony Chew and Wong Fong Hui — who hold a combined stake of 32 per cent.

Just shortly after he took over in March, Mr Ryan had to refute speculation that the budget carrier was in trouble. Then, the airline had dropped the Singapore to Pattaya route, and also failed to get landing rights in China and Indonesia.

Both countries rejected Jetstar Asia's application to fly to several key cities despite it having approval from Singapore aviation authorities.

"We were granted available rights by the Singapore Government to fly to certain cities in China and Indonesia, and we are unable to fly them. The Singapore Government has been unable to ensure that we can operate those services," said Mr Ryan. "It is really an issue that needs to be resolved government-to-government … The traffic rights were available and through no fault of our own we can't fly them."

But he is satisfied with how the airline is faring on its current routes.

Jetstar Asia, which began flying out of Singapore six months ago, flies twice daily from Singapore to Hong Kong and Bangkok, and once daily to Taipei and Manila. On average, 65 per cent of the seats are taken up.

When asked if a consolidation was possible in the face of increasingly stiff competition, Mr Ryan firmly rejected the idea.

"We are not looking at being consolidated with another airline. Our whole intent is that we survive in our own right," he said.

Mr Ryan added: "It's a period of intense competition where it's quite common knowledge that none of the new carriers are profitable. Whether there are too many (budget airlines) or not, the market will decide. Our task is to ensure the travelling public have fares to encourage them to travel and whatever happens in the marketplace, Jetstar survives and grows, and is not one of the airlines that may be consolidated."

Copyright MediaCorp Press Ltd. All rights reserved.

19 May 2005

Rise of budget carriers no threat to Singapore's air hub status: analysts
By Jeana Wong, Channel NewsAsia

SINGAPORE : The sprouting up of low-cost carriers in the region does not threaten Singapore's status as an air traffic hub, according to industry experts.

At an industry event, they said they expected to see more growth in the budget airline sector, and that Singapore was well-placed geographically.

But the speed of growth depends very much on how soon air rights can be liberalised.

Budget airlines now serve some 200 spots in the Asia Pacific and the Middle East.

But that is expected to more than double by the end of next year, with international and northeast Asia routes posting the strongest growth.

The expansion is supported by the large population base in the region as well as the economic recovery taking place across Asia.

Situated between Northeast Asia and India, Singapore is right in the thick of the action.

Said Peter Harbison, managing director of the Centre for Asia Pacific Aviation, "What we're talking about here is just massive growth. A lot of this growth is not about replacement; it's incremental, new stuff that would not have otherwise occurred. So I don't see Singapore, in that respect, is being under threat at all. Certainly what they've done in the last 12 months has been a shining light for the rest of the region in terms of what should be done."

Singapore has made efforts to negotiate for more liberal air rights, and is also building an airport terminal just for low-cost carriers.

Industry watchers say heavy regulations in the international arena are now suppressing competition and growth.

Mr Harbison said, "The whole process of removing controls, of liberalising, is that we're going to see a whole lot of different types of airlines. But there will be one thing in common: they will be low cost."

Competition among low-cost carriers is expected to be keen, but with the forecast of huge growth in the budget airline sector, some say that in the near term, we will see more cooperation among the carriers rather than consolidation. - CNA /ct

Copyright © 2005 MCN International Pte Ltd

Business Times - 20 May 2005

Region's budget airlines not consolidating yet: panel

But sector watchers warn of long-term regulatory hurdles, high fuel costs

By VEN SREENIVASAN

(SINGAPORE) Regional low-cost carriers face some serious long term challenges, but the industry is far from consolidating, say industry watchers who took part in a recent BT Roundtable discussion.

Panelists Peter Harbison of the Centre for Asia Pacific Aviation, Shukor Yusof of Standard & Poors and Nicholas Ionides of the Flight Group noted that the sharp rise in fuel price, regulatory barriers and protectionist instincts of governments posed serious problems for the low-cost carrier (LCC) operators in the region. But those are not serious enough to force a consolidation of the industry just yet, they say.

'I don't think the industry is heading for a premature consolidation,' Mr Harbison said. 'The power of (low-cost air travel) is irresistible.'

But he conceded that the present challenges could cause 'considerable pain' to some operators.

Perhaps surprisingly, panelists identified protectionism and regulatory impediments, rather than high fuel costs, as being the more serious challenge for regional LCCs.

'Flying within the region essentially means crossing international borders,' said S&P's Mr Shukor. 'LCCs can only fly to places where accords already exist. Hence if one wants to start a new LCC, one needs to be sure of getting rights.'

Mr Ionides added that the lack of free skies had prevented LCCs in the region from expanding as quickly as they would like.

'Volume is critical for the low-cost carriers, and they need as much access as possible, especially in the early days when revenue generation is so important,' he said. 'LCCs thrive in truly deregulated markets, and Asia is not even close to being that.'

And the impact of the lack of free skies is already beginning to show.

For example, JetStar Asia deferred taking delivery of four aircraft due to arrive this year after it failed to secure critical new routes to China and Indonesia. The latter made no pretences about its protectionist instincts when it suddenly slapped a blanket ban on all foreign LCCs last month.

Fuel is, of course another major issue that affects both full-service and LCC operators.

'At current levels, jet fuel will make or break an airline - any airline - regardless of it being a start-up or established legacy carrier,' Mr Shukor said. 'The longer oil remains at these levels of over US$50 per barrel, the more acute the problem becomes.'

Despite these challenges, the number of LCCs in the region will increase, say the market watchers.

'The underlying economic growth in this region and the tiny proportion of people who have yet flown makes the potential for growth far beyond levels that anyone can forecast,' Mr Harbison said. 'And this potential can be released almost overnight with deregulation. The faster Asean moves in this respect, the better.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

May 21, 2005
Indonesia keeps limit on S'pore budget carriers

JAKARTA - THE Indonesian government may let Singapore Airlines (SIA) add flights to Jakarta and Bali, while still limiting overseas budget carriers that want to compete with Garuda Indonesia, a minister said.

The issue of low-fare airlines is on the agenda for discussion next Wednesdaywith Singapore's Transport Minister Yeo Cheow Tong, Indonesian Transport Minister Hatta Rajasa said yesterday in Jakarta.

The ministers will discuss a request to let Singapore-based budget carriers Tiger Airways and Valuair add flights here, and let Jetstar Asia start flights to Jakarta.

The government, which owns and appoints managers to run Garuda, wants to protect the Jakarta-based carrier against mounting competition from Malaysia Airlines, SIA and South-east Asia's budget carriers.

Closely held Garuda, whose board members were replaced by the government in March to boost earnings, recorded a first-quarter operating loss of 139 billion rupiah (S$24.7 million), almost double last year's loss.

'Garuda has burdens from past bad stories...It needs restructuring,' said Mr Enggartiasto Lukito, a member of parliament in charge of transportation affairs.

'In other countries such as France and Singapore, they do protect their flagships. And that's what Indonesia should do, too.'

On May 12, Garuda said it wanted to delay repaying as much as US$523 million (S$872.4 million) in debt owed to European lenders.

If it is successful, it could save up to US$110 million this year in interest costs and principal payment, the airline said. It has debts of US$826.5 million.

The transport ministry said in March that new landing rights applications by overseas budget carriers for Jakarta, Medan, Surabaya and Denpasar will be rejected to protect local airlines.

Applications for the cities of Yogyakarta, Semarang and Bandung will also be rejected; those for other cities are welcome.

Singapore has written to Indonesian officials regarding the issue, Mr Yeo said last month. SIA's partly owned Tiger Airways flies to Padang, the provincial capital of West Sumatra.

Landing rights given to Valuair, which flies to Jakarta, and to Malaysia's AirAsia - South-east Asia's largest discount carrier, which has flights to Jakarta, Medan, Surabaya, Denpasar and Bandung - will not be affected by the restrictions.

The government is also likely to block a request from Singapore for a so-called 'open sky' policy that offers unlimited access to the nation's aviation market, Mr Hatta said.

Singapore 'should not get a no-limit policy', he said.

'The only country that gets the no-limit policy from Indonesia is the United States' because flights to the US are long-distance services that do not compete with Garuda, he added. \-- BLOOMBERG NEWS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Quite interesting to see this big shots talk about LCCs.....:D

Business Times - 21 May 2005

Battle for the Asian skies

OVERVIEW

SINGAPORE'S first budget carrier, Valuair, celebrated the anniversary of its first flight early this month. And the region's oldest budget carrier, Malaysia's AirAsia, is now almost four years old. In the last two years, South-east Asia has seen a steady proliferation of low-cost carriers (LCCs). They currently account for 7 per cent of Changi's passenger traffic and fly 175 weekly flights to 15 cities around the region from Singapore. We at The Business Times reckon this is a good time to take stock of how the regional budget airline industry has done, and do a bit of 'crystal-ball gazing' to see how the industry could develop in the next 12 to 36 months.

PARTICIPANTS
in the roundtable

Moderator: Ven Sreenivasan, BT Senior Correspondent

Panelists

# Nicholas Ionides, regional managing editor, the Flight Group

# Peter Harbisob, managing director, Centre the Asia Pacific Aviation

# Shukor Yusof, aviation specialist, Standard & Poor's

Ven Sreenivasan: How has the emergence of budget airlines affected the region?

Peter Harbison: I would call it a watershed. The arrival of LCCs has crystallised the move to liberalise and reform the airline industry, including straightforward relaxation of entry and the innovative cross border joint ventures epitomised by Thai AirAsia and Jetstar Asia. It has also forced a recognition by many flag carriers that there are many areas where they can improve cost structures and service. Some are still in denial, but they are a small minority now.

Nicholas Ionides: Clearly, they've had a significant impact, but it really is still early days as there is much more to come. Once liberalisation efforts are stepped up and some of the barriers to operation come down, there will be much more choice for consumers in terms of air travel. There are tens of millions of people in this part of the world who have never flown, and the new airlines will enable them to travel more.

Shukor Yusof: The major impact has been on consumer behaviour and travel patterns in South-east Asia. It has been a positive outcome for travellers. As flying becomes more affordable, people can spend more on hotels, food, shopping, and so on at their destinations. In places like Phuket there was an immediate benefit after the Dec 26 tsunami as LCCs continued flying in, helping local communities by bringing tourists there.

Ven: Do you think the LCC industry has grown as fast as you expected 12 months ago? And why?

Nick Ionides: In some markets, yes. In others, no. Overall, the growth has been generally as expected - in South-east Asia things are picking up steadily and we're starting to see the new airlines building up decent-sized route networks. The market that has been the biggest surprise is India. After years of failed promises in terms of liberalisation, the government has finally shown that it is committed to opening up the market. As a result, many new airlines are in the process of being launched, and air travel, which has been stifled for so many years, will become a real alternative to ground travel. One statistic sums it up extremely well: in India, the country's airlines only carried around 15 million passengers on domestic flights last year. The country's trains carry the same number each day.

Peter: Given the constraints of international regulation - and the previous 'wisdom' that there could be no international LCCs at all - I think the growth is remarkable. The fact that 7 per cent of Changi passenger movements are with LCCs could not have been imaginable when we held our first LCC conference in February last year. We have gone through the 'crash through' stage and now we are moving into a consolidation phase in South-east Asia, prior to the third phase when inter-government liberalisation really starts to open up the hundreds of city pairs which are ideal for low-cost, point-to-point service.

Shukor: Low-cost airlines grew faster than I expected, probably due to the failure of regional legacy carriers' ability to expand - with the exception of SIA and Cathay.

Ven: What, in your opinion, are the main challenges they face in this region, say, compared to Europe or the US?

Peter: International regulation. Nowhere else in the world has witnessed international LCC operations as we have here. In the European Union, LCCs have unregulated entry and are effectively domestic for these purposes.

Nick: Clearly, when we are looking at international operations, the regulatory barriers are the big challenge. Unlike in Europe, where there is a single market and airlines can essentially fly anywhere they like within the EU with no ownership restrictions, here in Asia there are many restrictions on operations. Bilateral air services agreements are often very restrictive, while ownership rules - that is, that airlines must be effectively owned and controlled by nationals of the country they are from - make things a big challenge for some.

Shukor: Without doubt, the three biggest challenges LCCs here face are the outdated air service agreements, regulatory constraints and the absence of a big network of secondary airports.

Ven: And to what extent will these challenges - especially the regulatory and protectionist ones - pose a serious challenge to the proliferation of more LCC operators?

Peter: In the short term, a considerable challenge, as we are seeing with the reactionary attitudes in Indonesia. But the forces of change are so powerful that, with China also becoming such an influential (and liberalising) player in the region, any setbacks will be temporary.

I am confident that the economic and political force of these operations will stimulate massive change. The underlying economic growth in this region and the tiny proportion of people who have yet flown makes the potential for growth far beyond levels that anyone can forecast. This potential can be released almost overnight, with deregulation. The faster Asean moves in this respect, the better.

Shukor: Flying within the region essentially means crossing international borders. So bilateral agreements are pivotal in determining the expansion of LCC networks. Most LCCs can only fly to places where accords already exist. Hence if one wants to start a new LCC, one needs to be sure of getting rights.

Nick: These challenges will mainly prevent the new airlines from expanding as quickly as they would like. Volume is critical for the low-cost carriers, and they need as much access as possible, especially in the early days when revenue generation is so important. As Shukor and Peter point out, LCCs thrive in truly deregulated markets, and Asia is not even close to being that.

Ven: The fuel price has risen by more than 50 per cent this year, and it remains at a stubbornly high level. The global aviation industry is expected to post a loss of US$5.5 billion as it pays out some US$76 billion for fuel this year. How serious a threat is the rising fuel price to regional LCC start-ups? What is its impact likely to be on the fledgling regional budget airline industry?

Shukor: At current levels, jet fuel will make or break an airline - any airline - regardless of it being a start-up or an established legacy carrier. The longer oil remains at these levels of over US$50 per barrel, the more acute the problem becomes. If oil hits higher levels, around US$60-70, then all bets are off for LCCs. How much more can a budget carrier pass on additional increases to its customers? The exception in Singapore is Tiger Airways, which shares its fuel needs with SIA, so to some extent it has a buffer because of SIA's hedging mechanism.

Valuair will struggle if oil remains at current levels or shoots up. So will Jetstar Asia. AirAsia has already announced plans to impose surcharges but will it be enough for LCCs? This is something we can't predict. Budget carriers can manage, albeit only just, at current oil price levels. A prolonged period of high oil prices could force an LCC out of business. The days of passengers flying for less than the price of a jug of beer may be numbered.

Nick: Rising fuel prices affect low-cost airlines in the same way that they affect full-service airlines, in that they add another fixed cost to the equation. Fortunately, here in Asia, fuel surcharges that many airlines have introduced have not appeared to have affected demand in any real way, so that is at least one positive. While more costly fuel is without question a challenge for regional LCC start-ups to deal with, the serious players will have factored fuel-cost uncertainty into their business planning so they should be able to cope - provided costs do not rise too much more.

Ven: Which operator in the region has the strongest model, in your opinion? Why?

Shukor: Tiger. It is the truest, purest form of low-cost model based on Southwest's tried-and-tested strategy.

Nick: I think the survivors will be AirAsia and Tiger Airways. Why? Because they are true to the 'traditional' LCC model. They do everything they can to keep costs down and offer the lowest-possible ticket prices. Particularly here in Asia, it is important to differentiate from the incumbent full-service airlines. There is a need for both types of airlines as they serve different kinds of travel patterns, but as the experience of Europe shows, differentiation is key.

Peter: AirAsia. Because it has the fundamental low-cost mentality as well as the cross-border base establishment which is essential to expansion for LCCs. It is significant that Tiger is now expressing the intent to enter into similar cross-border joint ventures.

Ven: LCCs here often complain of predatory pricing by full-service incumbents. Do you see a need for a pan-Asian anti-competitive practices legislation?

Peter: Predatory pricing is a legal concept which is notoriously hard to apply in the airline industry. Legislation would be impossible to introduce and almost as hard to apply. The great ability of the larger competitor to price this 'perishable product' (the airline seat, which disappears as soon as the doors are closed) marginally will always provide it with a great advantage. But the interesting fact - which has been repeated over and over - is that the power of the dedicated low-cost model is such that it quickly overwhelms the incumbents' anti-competitive responses. I believe that will also be the case here in Asia, even though the cost differential between incumbents and the new LCCs is not as great as in the US or Europe.

Shukor: The lack of a pan-Asian competition agency is, no doubt, a very negative factor for LCCs. New LCCs in this region are very vulnerable to predatory pricing by bigger players, as Valuair found out when SIA started to slash prices to Bangkok and Hong Kong. So yes, it would be nice to see an authority that deals with this.

Ven: Changi is building a $45 million low-cost terminal. Kuala Lumpur is doing something similar. Others could follow suit. How ideal is Singapore as a regional LCC hub?

Nick: Singapore is without question a strong regional LCC hub, and the government's attitude towards the establishment of new airlines and its support for them are key to this. Having said that, in order to truly thrive, the successful LCCs will have to spread their wings and have multiple bases across Asia - as AirAsia has done with its Bangkok-based Thai AirAsia and Jakarta-based Awair.

Shukor: Yes, it is the perfect hub. Singapore benefits, and will always benefit, from its unique geography - being at the focal point in the region. It has the best airport in South-east Asia, which will complement well the low-cost terminal when that is completed.

Peter: For me, it's not appropriate to talk of an LCC hub. Not yet, anyway. But Changi is a good base for LCCs because Singapore has a liberal aviation policy, a reasonable-cost product, a good outbound and inbound traffic market and fairly transparent process.

Ven: Valuair is considering medium-haul LCC operations (its chairman recently said his airline was eyeing destinations in the east coast of Australia). In your opinion, will the foray into medium-haul work for an LCC model?

Shukor: I hope it will, but I doubt it. Why? Because then it will be at the mercy of additional risks such as fuel prices, as larger jets mean more fuel costs. To be truly successful, LCC operations have got to be kept simple.

Nick: Medium-haul really has yet to be tested by a true LCC, so it remains to be seen whether it will work. Long or medium-haul low-cost is still just a concept, as the cost-saving benefits from operating short sectors with quick aircraft turnarounds and high frequency and so on are lost when going past a few hours' flying time. Those that have spread beyond the short-haul, low-cost model have generally done it by adding a second aircraft type and a business class, so the model by definition changes dramatically. What the airline really just becomes is a more traditional sort of carrier with perhaps a lower cost base than the incumbents because it has started with a clean sheet of paper.

Peter: The move into medium-haul by Asia Pacific LCCs is largely driven by the restrictions of bilateral route access. So it is not a market-driven step in the first instance. But it is essential to bear in mind that what we are witnessing now is not just the entry of LCCs. It is a liberalised revolution in airline (and route) entry of all kinds - in markets which have seen almost no new airlines in the past decade, despite years of high growth. There will be varieties of new airline product, but they will all be characterised by a concentration on costs.

Ven: Some industry specialists say the regional LCC market is in danger of premature consolidation due to protectionism and regulatory impediments (for example, Indonesia has slammed its doors on foreign LCCs, while China and India seem to be dragging their feet). Do you agree?

Nick: Not really, as those that have started new airlines or are establishing them know what the challenges are - if they didn't do their homework they're in the wrong business. From the market's point of view, there is nothing wrong with airlines failing (unless you're an investor, of course), as there will always be someone else looking to have a go and because it tends to make the healthier ones even stronger, allowing them to grow. It is better in my view to have a couple of very strong regional players than it is to have dozens of weak ones fighting for the little access that there is in this restricted market. Over time this will happen in Asia as the market matures - remember that this is still very early in the game, and as with any industry something new takes time to develop.

Peter: No, I don't think it is heading for a premature consolidation. This is a smaller risk than it appears in the very short term (although that may be long enough to cause considerable pain to one or two of the current operators). The power of this force is irresistible.

Shukor: Well, yes and no. Yes, because we're dealing with emerging markets and authorities with little experience of coping with the changing industry. No, because there are positive signs among Asean nations which seem to suggest that it is only a matter of time before some of these barriers are brought down.

Ven: Lastly, what is your prognosis for the regional LCC industry and market in the next three years?

Peter: At least 20 new LCCs in the Asian markets.

Nick: Essentially what we will see is who the players are that are truly in it for the long-haul. I agree fully with those who say the market is only really able to support a handful of key players on a pan-Asian basis, and those that expand aggressively in terms of building up route networks will have first-mover advantage. While there will continue to be multiple players in domestic markets, like Thailand and Indonesia, in terms of true intra-Asia international operations, there will probably only be two or three big players over time. This has been the experience in Europe, and I expect Asia to be the same.

Shukor: In the next three years, I expect low-cost carriers could increase their carry rates of passengers within the region. Lower costs of their point-to-point operations will become more attractive to the younger, more discerning travellers. I don't see LCCs threatening legacy carriers on international routes (such as SIN-BKK) because these are already very competitive and so yields for LCCs will be lower compared to the network carriers flying wide-body aircraft. In Singapore, Tiger will prevail, and Valuair will continue to fly as long as SIA allows it to (what I'm saying is that SIA can quite easily take Valuair out of business if it wants to) and the extent to which Valuair can take losses. As for Jetstar Asia, I'm not really sure. I don't know why it flies to Taipei first when mainland China is the place to be, and when cross-straits relations between those remain tense. Still, I think the LCC sector will grow from its current embryonic stage to a mature, growth stage in three years.

KEY POINTS

# The arrival of LCCs has forced liberalisation and reform in the regional airline industry.

# Regulatory barriers and protectionism remain the major challenges for LCCs.

# A prolonged period of high oil prices could force some LCCs out of business.

# The number of LCC players in the region will double in the next three years.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

23 May 2005

Singapore budget carriers eye more Indonesian landing rights
By Dominique Loh, Channel NewsAsia

SINGAPORE : Singapore's budget airlines could get more landing rights to domestic airports in Indonesia, according to reports.

Budget carriers are now eagerly anticipating the outcome of a meeting between Indonesian and Singaporean transport officials, to be held in two day's time.

Indonesian media had reported that the Indonesian government would discuss easing those restrictions imposed on budget carriers earlier this year.

The ban was put in place to protect Indonesia's own carriers.

Singapore budget carrier Valuair has been making a daily return flight to Jakarta for about a year now.

It even increased it to two flights a day by using a temporary permit for about two months.

But that meant Valuair could not do long-term selling of its tickets and it withdrew the second service.

Said Valuair chairman Lim Chin Beng, "Definitely our growth between Singapore and Indonesia had been stunted to a certain extent. It has affected our total growth."

The possibility of opening up Indonesian skies to carriers like Valuair would be a huge boost.

Valuair already has an average 70 percent passenger load to Jakarta alone.

Mr Lim said, "It would be a significant improvement in our total passenger load, revenue. We are not a typical LCC; if we are allowed more points in Indonesia, say Bali, we not only carry Singapore traffic, but from China. I know the Chinese love to go to beaches; since we operate to Xiamen and Chendu, we can sell all the way from China into Indonesia, from Hong Kong, Bangkok, from Perth."

Valuair believes there is a tremendous demand in the Indonesian market not only from tourists but also businessmen.

And if restrictions on landing rights in Indonesia are lifted, Valuair intends to speed up the acquisition of two more Airbus 320s before the end of the year. - CNA

Copyright © 2005 MCN International Pte Ltd

45 complaints against budget airline in 10 months, Case reveals

Tiger Airways gets most brickbats

CASE said in the last 10 months it has received 45 complaints against budget airlines but none against the full-service carriers.

By Kor Kian Beng
25 May 2005

CASE said in the last 10 months it has received 45 complaints against budget airlines but none against the full-service carriers.

Tiger Airways topped the list with 32 complaints.

There were eight complaints against AirAsia, four against Jetstar Asia and one against Valuair.

AirAsia was the first to fly from Singapore in February last year, followed by Valuair, Tiger Airways and Jetstar Asia in May, September and December last year respectively.

Case executive director Seah Seng Choon expressed concern over the number of complaints.

He said: 'We are concerned that budget airlines may not be setting aside sufficient resources to deal with customers' issues.'

Mr Seah said customers complained about problems accessing the budget airlines' websites, especially during promotions.

Customers have complained about finding only normal fares available when they expected to pay promotional fares.

There have also been complaints about poor customer service.

Mr Seah urged the budget airlines to take these complaints seriously.

He said: 'If the complaints continue to mount, the image of budget airlines may be affected and this may not be good for the industry in the long run.'

Case said one possible reason for complaints is that the budget airline industry is still relatively new in Singapore.

Consumers have yet to adjust to their service level.

Mr Seah added: 'The aggressive promotions by the airlines themselves over the last few months could have also pushed the demand for their services beyond the level they could cope with.

Agreeing with Case, the Tiger Airways spokesman said: 'Budget airlines have been set up only in the last year. Customers are learning to understand how budget airlines operate.

'They're also starting to adjust their expectations of the services offered by low-cost carriers, after many years of experience of travelling on full-service carriers.'

Jetstar Asia and AirAsia told The New Paper that they are providing quality service since there have been few complaints against them.

Valuair could not be reached for comment.

Said Mr Greg Thompson, vice-president of operations at Jetstar Asia: 'The four complaints made against Jetstar Asia, as compared to the total of 45, serve to highlight the excellent levels of service provided by Jetstar Asia.'

An AirAsia spokesman said: 'Customer service is a top priority at AirAsia, apart from ensuring that high safety standards are met.

'Low fare does not equal bad service. We are constantly monitoring our customer service level.'

TIPS FROM CASE

# Compare the prices and services provided first before booking.

Alert the company if the advertised price differs from the booking price.

# Check the full list of cost items and bear in mind that the ticket price is NOT the only cost item that consumers have to pay. Consumers will be asked to pay for tax, fuel charge etc.

# Read the terms and conditions when booking for tickets. Pay particular attention to alteration costs, cancellation costs and penalty if any.

# Check the airport where the airline is landing. Some budget airlines use peripheral airports instead of the major airport in the city.

# When booking online, always print a hard copy for reference.

# Airline service is covered under the Consumer Protection Fair Trading Act and consumers have the right to seek redress if the airline engages in unfair practices.

Copyright © 2005 Singapore Press Holdings Ltd.

This story was printed from TODAYonline

Former Valuair CEO Sim joins Jet Airways

'Proven leader' will focus on route studies, market forecasts

Friday • May 27, 2005

Shobha Tsering Bhalla
shobha@newstoday.com.sg

THE old adage which says one can't keep a good man down for long has held true, with the appointment of Valuair's former chief executive officer, Mr Sim Kay Wee, to two plum posts in the airline industry.

Mr Sim, has joined India's leading domestic airline Jet Airways as its senior regional representative and Changi Airport Managers and Partners (Singapore) — Champs — as a senior consultant. He will hold both appointments on a part-time basis.

Mr Sim started work with Champs on the first of this month and with Jet Airways on May 16.

The offers came almost immediately after Mr Sim resigned from Valuair last month — after only nine months with the airline — for what he said were "personal reasons". But some industry insiders speculated he quit due to tensions between him and the airline's senior management.

As a buoyant Mr Sim put it: "Barely had I put on my sun-tan lotion and hit the golf course when Mr Boon Swan Foo, chairman of Champs, called me for a chat."

His new job was the outcome of the "chat". Mr Boon said he called Mr Sim "as soon as it was confirmed he had resigned" because he is a "proven industry leader".

"Before he joined Valuair, he was with SIA and Sats (Singapore Airport Terminal Services) and has a wealth of industry experience," said Mr Boon.

"In the airport business, we need people who understand the business not only from the airport's point of view but also from the airlines' and users' point of view."

Mr Sim's consultancy with Champs includes working on routes studies, as well as market and traffic forecasts of overseas airports which Champs intends to bid for.

When asked why he was taking on these posts so soon after his hectic stint at Valuair, Mr Sim said: "With nearly 35 years immersed in the aviation industry, it's hard to get rid of the aviation fuel running through one's bloodstream."

Hiring Mr Sim is part of Jet Airway's strategy of netting the best people in the industry said Mr V Raja, the airline's vice-president for South-east Asia.

"Our chairman, Mr Goyal, has an eye for good people," said Mr Raja, a 34-year veteran in the industry himself.

Mr Sim's duties with Jet Airways include assisting in getting traffic rights for viable routes.

Last month, Jet Airways started daily flights from Mumbai to Singapore — its first destination outside South Asia.

Copyright MediaCorp Press Ltd. All rights reserved.

Business Times - 27 May 2005

Tiger Airways to start daily flights to the Philippines

SINGAPORE - Singapore low-fare carrier Tiger Airways said on Friday it will begin daily flights to the Philippines from July 30, up from five times a week, due to strong demand.

'The increase will allow Tiger Airways to carry more than 180,000 passengers to the Philippines in a year, bringing about economic benefits to tourism and businesses in the region,' the airline said in a statement.

Airline chief executive Tony Davis said the increase in flights was the 'direct result of requests' from Filipino officials. He said Tiger Airways has noticed 'strong forward bookings' for the June-July period.
Read Tiger Airways' news release

Tiger Airways, which is 49-per cent owned by Singapore Airlines, began flights to Clark Field, 80 kilometres north of Manila, on April 5.

Airline tickets for a one-way trip between July 1 and August 31 had been selling for as low as $14.98, excluding taxes and other charges, according to the Tiger Airways website.

A one-way ticket to Manila on Philippine Airlines costs about $310. On Singapore Airlines, it will cost roughly $480.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

May 29, 2005
Move to start budget cargo airline

MyJet Asia CEO and former Unisys Singapore partner team up to vie for share of growing pie; first flights from next April if My Air Cargo gets nod

By Chua Kong Ho

ONE makes a living flying rock stars, royalty and tycoons on sleek Gulfstream jets. The other has spent years as a management consultant advising airlines how to improve their operations.

Now, MyJet Asia chief executive Logan Ravishankar, 42, and former Unisys Singapore partner Natesan Ramesh, 54, are teaming up to start a low-cost cargo airline, My Air Cargo, delivering anything from cantaloupes to computer chips using leased Boeing 757s or 767s.

Their target markets are secondary cities that do not have enough air-cargo links to major logistics hubs such as Singapore.

Simply put, the two men want to do for cargo what AirAsia did for budget travellers.

Said Mr Ravishankar, who started out piloting airmail flights in the United States: 'We expect to submit our application for an air operator's certificate within the next 90 days.'

If things go according to plan, My Air Cargo could start its first flights next April, which would make it the second Singapore-flagged all-cargo airline, besides Singapore Airlines (SIA) Cargo.

SIA Cargo, a wholly-owned subsidiary of SIA, is the world's second-largest cargo airline. Along with the seven other cargo carriers that fly through Changi, it is likely to try to stamp on My Air Cargo with a short, decisive price war if the newcomer tackle it head-on.

Mr Ramesh is fully prepared for that.

'We're ants playing in elephants' territory. For sure the elephants will stomp on the ants, but that doesn't mean the ants will surely die,' he said.

After all, My Air Cargo is planning to target destinations that have few, if any, scheduled air-cargo services, so its operations will only strengthen Singapore's position as one of Asia's leading air logistics centres.

The new airline's two founders are hoping to raise between US$25 million (S$41.5 million) and US$30 million for the initial round of financing.

The Civil Aviation Authority of Singapore told The Sunday Times that Mr Ravishankar had made 'general inquiries' and sought 'clarification on certain information'.

A number of new regional cargo airlines have been starting up in India and China in recent months, in tandem with the increased trade flows generated by the two booming economies.

The International Air Transport Association has forecast that all five of the fastest-growing freight markets until 2008 will be in Asia. Already some major carriers have staked their claim.

Earlier this month, SIA Cargo announced it was forming a joint-venture cargo airline in China. Rival Lufthansa Cargo has a similar joint venture with Shenzhen Airlines.

The going for My Air Cargo will undoubtedly be tough.

'It takes a very brave man to start a cargo airline at this time, with the high fuel prices and keen competition,' said Mr Nol van Fenema, editor and publisher of airfreight industry trade journal Payload Asia, 'But it might work if they are very disciplined about keeping their costs low and not going head-on with the incumbents.'

Copyright © 2005 Singapore Press Holdings. All rights reserved.

29 May 2005 - JetStar Asia

http://img194.echo.cx/img194/4290/dsc56347io.jpg

http://img264.echo.cx/img264/3928/dsc56383pc.jpg

^Wow.....beautiful.....can post them in the international forum?? :D

http://www.skyscrapercity.com/showthread.php?p=4254181#post4254181

makes me think of american airlines actually

makes me think of american airlines actually

Must be grey colour.....:yes:

@babystan03
Thanks. Okie...

@heirloom
It's originally grey. :)

Hya nice pics on Jetstar-planes!!:)

do also post your pictures at http://www.airliners.net :yes:

09 June 2005

Lack of price difference keep low cost carriers on the sidelines
By Jeana Wong, Channel NewsAsia

SINGAPORE: Low cost carriers may have kickstarted a price war within the airline industry.

But industry-watchers say full-service airlines appear to be heading off the attack.

For now, comparable pricing between the two types of carriers is preventing budget airlines from taking off in a big way.

Full-service airlines operating in Singapore have responded proactively to the surge of budget carriers here.

To protect their turf - some have given more attention to their branding and pricing strategies.

Sean Seah, Singapore Manager, Zuji Enterprises
"Some of them will invest in their branding to differentiate themselves from the low cost carriers. Others will get smarter about pricing in terms of to compete with the airlines. And others will, just look for new forms of distributions." said Sean Seah, Singapore manager for Zuiji Enterprises.

"We work closely with several airlines to distribute online to give them the fast speed-to-market that the budget carriers have in terms of their website distribution." he added.

These aggressive measures are driving down airfares across the board.

A flight from Singapore to Sydney which would have set the traveller back by about $850 dollars last year, only costs about $400 now.

Such steep price drops are erasing the edge that low cost carriers have over their full service counterparts in terms of pricing.

A local survey reveals that four out of five respondents will only consider flying with budget airlines if prices were at least 30% cheaper.

This means low cost carriers would have to work hard to attract Singapore travellers.

"If they've done their homework right, if they've got the cost-base right, they can offer substantially lower fares than the incumbent full-service airlines, who naturally have a higher cost base. So as a result, that's what's going to differentiate themselves and that's what's going to ensure their survivability." said Nicholas Ionides, regional managing editor for The Flight Group.

Industry watchers say it will be difficult for full service airlines to keep up with price war over the long term, but they expect prices to remain competitive. - CNA /dt

Copyright © 2005 MCN International Pte Ltd

June 13, 2005
Asian budget carrier war may claim casualty

KUALA LUMPUR - STIFF competition and rising fuel prices will force a shake-out among Asia's budget airlines, and some are likely to be permanently grounded, analysts say.

The success of Malaysia's AirAsia has brought forth a slew of other budget operators, including spin-offs from major airlines that scrambled to cash in on the phenomenon. 'Competition is tough. I foresee a dropout soon,' said OSK Research aviation analyst Chris Eng.

Singapore's low-cost carriers are considered the most vulnerable because the absence of a domestic market to fall back on means that they are forced to fight with the major airlines in the global market.

Mr Eng said there would be a struggle for survival between privately owned Valuair; Qantas-backed Jetstar Asia; and Tiger Airways, which is 49-per cent owned by Singapore Airlines (SIA).

Mr Bryan Lim, an ECM Libra aviation analyst, said: 'In Singapore, there is a possibility one budget airline will fold. International flying rights are done on a government-to-government basis, so most of Singapore's flying or landing rights would naturally go to SIA.'

Singapore's investment company, Temasek Holdings, holds stakes in both Tiger and Jetstar, giving them more financial muscle, he said.

'But Valuair has its own strategy,' Mr Lim added, referring to its market position as a mid-range carrier between the ultra-cheap and premium airlines. -- AGENCE FRANCE-PRESSE

Copyright © 2005 Singapore Press Holdings. All rights reserved.

June 15, 2005
No help for Jetstar to get more flights? Not true, says Govt
Singapore refutes claims by Qantas-backed budget carrier

SINGAPORE has refuted claims by Qantas-backed JetStar Asia that the Government has not done enough to help the airline gain more flight routes.

'It is our desire to see all Singapore carriers, including Jetstar Asia, succeed and the Singapore Government will do its best to facilitate their operations, including negotiating with foreign authorities to remove any restrictions,' a Ministry of Transport statement said.

The ministry's comments, reported in the Sydney Morning Herald yesterday, were issued on Saturday in response to remarks by Qantas chief financial officer Peter Gregg in the newspaper a day earlier.

Mr Gregg was quoted as saying 'there appears to be nothing Singapore was prepared to do' after Jetstar was denied the right to fly to Indonesia.

Earlier this month, Singapore Airlines (SIA) was granted 25 new flights to Indonesia, following talks between Transport Minister Yeo Cheow Tong and the Indonesian government.

There was none for Jetstar, a budget airline in which Qantas has a 49 per cent stake and Singapore's Temasek Holdings, 19 per cent.

Qantas also highlighted Jet- star's woes to back its argument for denying SIA access to the lucrative Australia-United States route.

The Transport Ministry strongly rejected Qantas claims that it had failed to act on Jetstar's behalf.

'Singapore is firmly committed to competition and free trade, and adopts an open and liberal aviation policy,' it said in its statement, a copy of which was obtained by The Straits Times.

'We believe the economic benefits of having more airlines and tourists in Singapore far outweigh the arguments for protecting any incumbent Singapore carrier.'

In any case, it noted that Jetstar was given four other destinations in China and Indonesia, but chose not to fly there. It did not specify the destinations.

'Jetstar Asia has received the requisite traffic rights from the Singapore Government for almost all the operations it has applied,' the ministry said.

'It is therefore unfortunate that senior Qantas officials should cast doubt on this without good grounds.'

However, Jetstar chief executive Ken Ryan told the Sydney Morning Herald the four routes it had been offered were 'developmental routes', and not ones such as Shanghai, Jakarta or Surabaya which would be 'absolutely critical' to the airline's profitability.

Jetstar was reportedly blocked from flying to those three destinations by local authorities, and was forced to lease out four of its eight Airbus A320s.

Jetstar currently flies from Singapore to Taipei, Hong Kong, Manila and Bangkok.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Anyone here holds a OCBC debit/credit card?? There is this offer by Valuair where you get a free return ticket to Bangkok when you pruchase a return ticket to Hongkong.......:yes:

More details here.....:yes:

http://www.valuair.com.sg/travel_products/promotions/sin/index.html

15 June 2005

Airbus to sell eight A320 jets to Singapore's Tiger Airways

SINGAPORE : European aircraft maker Airbus said it will sell eight A320 jets to Singapore-based regional budget carrier Tiger Airways, with the first of the 180-seater planes to be delivered in March 2006.

Airbus did not say how much the deal is worth, but aviation industry sources in Singapore estimated its value at around US$500 million.

It marks the first time that Tiger Airways will be acquiring its own planes instead of leasing since it started flying in September last year.

Tiger Airways is 49 percent-owned by Singapore Airlines and currently has a fleet of four leased A320s. It flies to Indonesia, Macau, the Philippines, Thailand and Vietnam.

"We are delighted to be adding further Airbus A320 aircraft to our rapidly expanding fleet which will enable us to consolidate our position as Singapore's largest low-fare airline," said Tony Davis, the airline's chief executive.

"The A320 has proved popular with both passengers and crews of Tiger Airways and provides the airline with the economics and range necessary for our continued success," he added in a statement issued by Airbus.

The A320 is popular with low-cost carriers worldwide, accounting for 81 percent of all aircraft ordered last year by discount airlines, according to Airbus. - AFP/de

Copyright © 2005 MCN International Pte Ltd

June 20, 2005

AIR TRAVEL
Falling fares fuel short getaways
Budget carriers and price war are changing the way that Singaporeans travel

By Arthur Poon and Krist Boo

AIR fares to nearby cities have come down sharply in the last 18 months, prompting Singaporean travellers to make more short getaways.

Ticket prices for some destinations within a five-hour flying radius have fallen by as much as 80 per cent, thanks to the arrival of low-cost carriers and fierce competition with full-service airlines.

Prices have come down most sharply for Hong Kong and Bangkok.

A return economy ticket - excluding taxes and surcharges - to Hong Kong on Singapore Airlines or Cathay Pacific was $325 to $450 in December 2003.

Now, a budget airline like Jetstar will get you there and back for just $156. Or even less, if you manage to grab one of the super-low-priced tickets that go on offer.

Similarly, a ticket to Bangkok on AirAsia starts from as low as $44 these days, a far cry from the $245 on Thai Airways 18 months ago.

Jetstar and AirAsia are among four low cost carriers that now fly out of Changi Airport. The others are Singaporean carriers Valuair and Tiger Airways.

Their arrival has forced the full-service airlines to bring down prices too.

A Valuair spokesman said: 'Those who used to travel once a year are now travelling much more frequently.

'The affordable air fares have made travelling easy and many now decide to fly on the spur of the moment.'

Cheering the change, human resources executive Wendy Law, 28, visited Hong Kong in January and Bangkok last month, taking a budget airline both times.

The money saved on fares went to shopping, she said.

From January to April, 166,000 Singaporean travellers went to Hong Kong, a 57 per cent increase over the same period last year, according to the Hong Kong Tourism Board.

The numbers visiting Bangkok are up too. Civil Aviation Authority of Singapore figures show that 248,505 went in April, up from 230,468 during the same month last year.

Landmark Travel's Angela Tan said Bangkok's cheap beer, budget hotels and low-priced shopping are the main draws for her young and expatriate customers.

'They say it is cheaper to spend a weekend in Thailand than it is here. And they can buy duty free items when they return,' she said.

The sharp drop in ticket prices has changed the way people plan their trips too, agents say.

SA Tours' general manager Alicia Seah said: 'Previously, many Singaporeans saved - sometimes for years - to go on long-haul trips. Now, they take four or five short trips a year within the region.'

Chan Brothers marketing communications manager Ivy Tan said: 'More are flying off on Friday evening, leaving from the office directly to the airport, and flying back on Sunday night.'

If fares keep sliding, the day may come when people do a day trip just for lunch and a massage in another country, said the National Association of Travel Agents Singapore.

The lower fares in Singapore are an exception in the Asia-Pacific region, where surging oil prices have pushed ticket prices up, according to a recent study by American Express.

The company's head of consulting services Robert Tedesco noted: 'Low cost carriers have been competing intensely for a bigger market share.'

The same trend is seen on Indian routes to cities such as New Delhi and Mumbai - both within six hours of Singapore.

Fares to these cities have fallen at least 10 per cent since the entry of Air Sahara and Jet Airways in May. The two carriers broke the long-standing grip on the sector by Singapore Airlines and subsidiary SilkAir, as well as Air India and Indian Airlines.

Cheaper fares to more destinations are in store.

Tiger Airways' chief executive Tony Davis predicted: 'With more countries subscribing to the open skies policy and the opening up of more destination choices, there will be increased competition in other sectors as well.'

Copyright © 2005 Singapore Press Holdings. All rights reserved.

June 20, 2005
Deal struck on unlimited S'pore-HK flights
Move may spell more options, lower airfares for travellers

By Arthur Poon

SINGAPORE has reached a deal with Hong Kong to allow unlimited direct passenger flights between the two cities.

The decision is likely to result in more flight options and possibly cheaper flights for travellers, said one industry player.

'Consumers can benefit from the lifting of flight restrictions by having greater flexibility in flight schedules and a possibility of lower airfares,' said Mr Arthur Lim, senior executive vice-president of low-cost airline Valuair.

Valuair had no immediate plans to put on more flights but rival Jetstar Asia chief executive Ken Ryan said his airline would 'consider the option to build on the opportunities'.

The deal is short of an open-skies agreement, which would allow airlines to pick up passengers in Hong Kong and fly them to other destinations, but will nonetheless cement the strong air links between the regional air hubs.

The agreement will benefit six airlines: Singapore Airlines, Hong Kong's Cathay Pacific, as well as Jetstar, Valuair, China Airlines and United Airlines. The six carriers operate 238 weekly flights between the two cities.

The number of travellers flying to Hong Kong in April shot up by 25 per cent to 170,408, compared with the same month last year, according to figures from the Civil Aviation Authority of Singapore (CAAS).

Announcing the deal on Thursday, the CAAS said 'both sides reached a provisional agreement to lift all restrictions on direct passenger flights between Hong Kong and Singapore'.

The Hong Kong government has been negotiating new air services agreements to liberalise its market and promote competition. It also wants to encourage low-cost airlines to use Hong Kong's Chek Lap Kok airport as a base.

'We hope to make Hong Kong attractive to low-cost carriers,' Mr Wilson Fung, Hong Kong's deputy secretary for economic development and labour, told reporters in Hong Kong last week.

'We are never worried about competition. The more the merrier and the market will adjust.'

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Latest deal for Tiger Airways, cost only S$133 (include tax) to go Macau....:D

http://www.tigerairways.com/

Good deal I think......:D

thats cool:)

babystan.so you are going?:)

thats cool:)

babystan.so you are going?:)

Haha....see first......check my schedule first.....:D

29 June 2005

Singapore's Tiger Airways buys Airbus planes for US$500m

SINGAPORE - Singapore's budget carrier Tiger Airways said Wednesday it would buy eight A320 planes from European aircraft maker Airbus for US$500 million.

The first two aircraft are scheduled for delivery in March 2006, and another three in the third quarter of that year, the carrier said in a statement. The final three planes are scheduled for delivery in 2007.

Tiger Airways, which is 49-percent owned by Singapore Airlines, will have a fleet of 12 A320s when the deliveries are completed. The carrier currently flies to Indonesia, Macau, the Philippines, Thailand and Vietnam.

"Tiger Airways has met its business target in the first 10 months of operations," the carrier's chief executive Tony Davis said.

"The board of directors has endorsed our plans to expand services by Tiger Airways in the region. We anticipate Tiger Airways will carry four to five million passengers a year."

The A320 is popular with low-cost carriers worldwide, accounting for 81 percent of all aircraft ordered last year by discount airlines, according to Airbus. - AFP/ir

Copyright © 2005 Agence France Presse. All rights reserved.

29 June 2005
Tiger Airways to set up bases outside Singapore

By Yip Siew Joo

Singapore low cost carrier, Tiger Airways is seriously looking at setting up bases outside Singapore, to tap markets such as China.

CEO Tony Davis says Tiger Airways is already in negotiations with a number of potential partners.

This will give the carrier a wider geographical coverage and access to domestic markets.

He adds that Tiger Airways can operate to China from these regional bases, as the travel distance is shorter, as compared to launching flights from Singapore.

Mr Davis also says that Tiger Airways will also explore forming a joint venture with a partner not related to the airline industry.

"Most important thing is to find the right partner. We're going to grow this airline. and we know that there's limited capacity in Singapore given the population size and the number of traffic rights. If we can grow faster by having parallel operations outside of Singapore, that's what we are looking to achieve."

Mr Davis says the airline has been in talks with regional governments on structural arrangements.

He stressed that Singapore will remain Tiger Airways' primary base.

It's also committed to using the low cost terminal being built at Changi.

Mr Davis was speaking at the launch of the carrier's revamped brand name.

The airline is adding "dot-com" to its logo, mainly to direct more people to book their tickets online.

Tiger Airways recently bought eight new planes and will launch them into service progressively.

It expects to carry up to 5 million passengers a year when its fleet of 12 aircraft are in service.

Copyright © 2005 MediaCorp Radio Internet Development Unit

Business Times - 29 Jun 2005

Valuair, Jetstar discuss possibility of alliance

Talks understood to have gone on for several weeks

By VEN SREENIVASAN AND JOYCE KOH

(SINGAPORE) In a sign of what could be the first in a wave of consolidation in the low-cost airline industry, Singapore-based discount carrier Valuair and Qantas' Singapore low-cost associate Jetstar Asia are in talks about a possible alliance.

Valuair director Arthur Lee confirmed that the two were in talks, but he declined to go into details about the discussions.

'We are in talks to explore any form of cooperation,' he said when contacted yesterday. 'Our sheet of paper is blank and our discussions are wide ranging.'

Jetstar Asia's chief executive, Ken Ryan, said the two sides were looking for synergistic benefits. 'We are exploring all sorts of ways we can work together or cooperate with each other,' he said.

BT understands that the talks have been going on for several weeks.

Industry insiders suggested that the talks could lead to either some kind of cooperative code-share arrangement, an equity swap or even a merger between the two budget carriers.

Valuair was founded by a group of shareholders led by its chairman Lim Chin Beng. But currently its biggest single shareholder is Malaysian-listed Star Cruises, which injected some $15 million into the company last year.

Jetstar Asia, which started operating last December, is 49 per cent owned by Qantas. Temasek Holdings has a 19 per cent stake, while 22 per cent is held by Singaporean businessman and Del Monte chairman Tony Chew. Another 10 per cent is owned by businessman FF Wong.

The two airlines are holding talks as regional budget carriers continue to struggle to make money amid rising fuel costs and reluctance by regional governments to open up their skies to foreign carriers.

Jetstar Asia deferred taking delivery of four aircraft due to arrive this year after it failed to secure critical new routes to China and Indonesia.

Indonesia, in particular, made no pretence about its protectionist instincts when it slapped a blanket ban on all foreign budget airlines in April, saying it needed to protect its home-grown players, especially flag carrier Garuda.

Jetstar Asia also had to pull out of Pattaya in Thailand as load plunged following the Dec 26 tsunami.

Valuair, which celebrated its first anniversary in May, has also had a tough time trying to fill its planes amid stiff price-cutting competition from some full-service carriers.

Analysts note that an alliance between the two carriers is not such a far-fetched possibility, given that their products are more similar to each other's than those of low-cost rivals AirAsia or Tiger Airways.

Both Valuair and Jetstar Asia offer a 20kg baggage allowance and allocated seats. They also fly four Airbus A320 planes each. And while only Valuair offers simple meals, it would not be difficult for Jetstar Asia to do the same.

Analysts say Valuair, which has raised almost $40 million from individual shareholders and Star Cruises, would benefit from Jetstar Asia's stronger shareholder base.

'Jetstar may have some publicised problems but it has stronger key shareholders and is backed by a very profitable airline (Qantas),' said Seah Hiang Hong of Kim Eng Research.

'Valuair's model is sandwiched between the full-service model and the low-cost model, and with rising oil prices and lack of strong shareholder backing, it could have a tougher time in the longer run.'

Any new capital - if indeed the two are headed for a merger - would come in useful for the discount carrier, which is contemplating spreading its wings to the medium-haul market using wide-body planes. Its chairman, Lim Chin Beng, recently told BT that his company was 'seriously studying' possible services to eastern Australia, which could include the major cities of Sydney, Melbourne and Brisbane.

The company has already applied for Etops (extended twin engine operations) certification which allows twin-engine planes like the A320 to travel long distances over stretches of water or large uninhabited land masses where there are no airports.

Even if the two companies are not headed for a merger, they would benefit immensely from a cooperative arrangement. At the very least, a code share or interline arrangement would enable both airlines to offer customers multiple daily flights to eight destinations in Asia.

But despite Valuair and Jetstar Asia's attempts to play down suggestions of an equity link-up, some analysts remain convinced that this is where they are headed.

'There are too many players,' said Kevin Scully, managing director of NetResearch Asia. 'Phase One is survivability, but the capital available is probably shrinking faster because of price-cutting and high energy costs. (Malaysia's) AirAsia has access to the capital market now with its listing and Tiger Airways has a strong parent in Singapore Airlines.

'As for Jetstar, it probably figures it is easy to partner someone who is already established so that it can leapfrog over the other players and move up Valuair's learning curve.'

http://business-times.asia1.com.sg/mnt/media/image/launched/2005-06-29/290605vsvalu.gif

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Tiger Airways doesn't intend to form an alliance with local airline

Tiger Airways says it doesn't intend to form an alliance with a local airline --

This is a plan that its two Singapore-based rivals are said to be considering..

A news report said ValuAir and Jetstar Asia have been in talks to explore any form of co-operation and look for synergistic benefits.

Asked about the development today, CEO Tony Davis says Tiger Airways will not pursue a similar plan.

He didn't want to be drawn into commenting if this would mark a consolidation among budget airlines here.

"In any joining of businesses, you have to ask what you get out of it. The airplanes are leased, the traffic rights, as I understand it, would have to be returned to the government for reallocation. What assets? what brand? I don't know. It doesn't worry me. We feel we are already stronger than our competitors locally."

Copyright © 2005 MediaCorp Radio Internet Development Unit

29 June 2005

Valuair, JetStar Asia not likely to merge

By Karen Tay

A merger between two Singapore-based budget carriers, Valuair and JetStar Asia is not likely to happen.

Some analysts told 938Live a code share or interline arrangement between the two airlines is a more viable option.

Chief Correspondent at Orient Aviation Magazine, Tom Ballantyne, says a union between the two will not work out as both have different business models.

"Valuair has never pretended to be a true low cost model. It wants to carry cargo, it wants to give its passengers a certain level of service. Whereas JetStar Asia is far closer to a true low cost airline model. So they both have to come and meet somewhere in the middle, if they were to actually merge. I don't think JetStar is throwing away its model and suddenly become a Valuair and vice versa."

Instead, Mr Ballantyne reckons an interline arrangement is what the two are looking for.

Under such an arrangement, passengers from one carrier can hop onto the other airline, which flies to cities the first carrier doesn't fly to.

Valuair flies to certain destinations in which JetStar doesn't, and vice versa.

They include Perth, Jakarta, Manila, Chengdu and Xiamen.

On the other hand, Standard & Poor's Editorial Director, Shukor Yusof thinks a code share system between the two is a more possible form of partnership.

"Both carriers flying to destinations that provide the highest load factors. As I understand both carriers are struggling to fill in the planes in some of the places they fly to. So that's one immediate area where they could work together."

When contacted by 938Live, Valuair's Director, Jimmy Lau declined to say what kind of alliance it's exploring with JetStar.

Singapore's budget carriers have been bleeding and are not likely to break-even in their first year of operations due to intense competition.

Copyright © 2005 MediaCorp Radio Internet Development Unit

June 30, 2005
Budget airlines: Bigger, more planes
To survive, two may merge, while another will buy eight more jets

By Arthur Poon

THE shape of the crowded budget airline industry here is set to change with fewer but bigger low-cost airlines running larger fleets.

The 'size matters' strategy was evident when the media announced a possible merger between Valuair and Jetstar Asia.

It was also clear when Tiger Airways said yesterday it would spend US$500 million (S$835 million) buying eight new planes, tripling its fleet to 12 by 2007.

Supporting the 'size matters' argument, Qantas-backed Jetstar yesterday said that 'Jetstar Asia and Valuair are exploring a variety of ways that they can work together or cooperate with each other'.

This confirmed a report in The Business Times newspaper yesterday that both airlines are discussing the possibility of an alliance.

While a cooperative code-share arrangement or an equity swop were suggested, a merged Valuair and Jetstar entity will effectively double their existing fleet size to eight A320 planes - twice the number each now have.

Tiger's first two aircraft purchases will be delivered in March next year, and a further three in the third quarter of the same year. The final three are scheduled for delivery in 2007.

Said Tiger's chief executive Tony Davis: 'We anticipate Tiger Airways will carry between four and five million passengers a year when we have all 12 of our A320 aircraft in service.'

It now flies over a million passengers to 10 cities in six countries, and plans to add 'two or three routes in the next few weeks'.

Tiger is also planning to explore possible partnerships outside Singapore, and yesterday hinted it may seek a secondary base in Asia to tap markets such as China.

On the need for market consolidation, industry watchers were not surprised it came just a year after three Singapore-based low-cost carriers - Tiger, Valuair and Jetstar - started operations.

A fourth carrier, AirAsia, has been flying out of Singapore since December 2001.

'There are too many players,' said Mr Kevin Scully, managing director of NetResearch Asia.

Faced with rising fuel costs now around US$60 a barrel and cut-throat price competition, analysts feel a shake-up has been on the cards for some time already.

DBS-Vickers Research aviation analyst Chris Sanda said: 'It is natural dynamics for consolidation among the No. 2, 3 or 4 competitors in a market.'

Mr Sanda sees a Valuair-Jetstar merger as a defensive move on Jetstar's part, since it is in a relatively weaker position than the rest, being the newest kid on the block.

Mr Seah Hiang Hong, head of research at Kim Eng Securities, said: 'If they can't make profit on a stand-alone basis, then they will want to harmonise their existing networks and rationalise flights on certain routes.

'They can also extract cost savings by merging their back-room functions and lower their overheads on a per unit basis.'

However, Mr Sanda cautions that while the goal is to improve their cost structures, the key will lie in the execution.

This is because unlike low-cost carrier Jetstar, Valuair is sandwiched between the full-service model and the low-cost model.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 30 Jun 2005

Regional airline mergers now look inevitable

Trend likely to take off given conditions on the ground and the promptings by ministers

By VEN SREENIVASAN

(SINGAPORE) Merger mania seems to be in the air. First, Australian ministers suggested that Qantas could tie up with Singapore Airlines. Then Valuair and Jetstar Asia confirmed that they are in talks on a possible alliance. And yesterday, Tiger Airways indicated that it is looking for a partner overseas, possibly an airline.

But the biggest surprise of all came when Singapore Transport Minister Yeo Cheow Tong said that SIA - Singapore's national icon and world-famous brand - should explore a merger with Qantas.

'As commercial companies in a very competitive sector, I think it is useful for the two companies to keep all options open, which includes joining in the consolidation process,' Mr Yeo told surprised reporters yesterday.

While a merger between SIA and Qantas - both profitable and both flag carriers - seems remote for the moment, moves towards marriage have already started in the budget segment.

And analysts aren't surprised.

'The operating environment for regional low-cost players is getting increasingly difficult and many are bleeding badly,' said Standard & Poor's aviation writer Shukor Yusof.

'At this rate it's just a matter of time before someone is forced to shut up shop.'

Valuair, Jetstar Asia and Tiger Airways are amomg more than a dozen low-cost carriers (LCCs) that have sprouted around the region in the past three years. And most are being throttled by rising fuel prices, cut-throat competition and protected skies.

While numbers aren't available for Tiger Airways and Jetstar, Valuair lost $4.1 million versus revenue of about $85,000 in its seven months of operation last year. Much of this loss was due to start-up costs - but prospects remain dim this year because fuel prices have doubled.

Valuair, which raised about $38 million in shareholders' funds, has been looking at an initial public offer to raise more money. But it has to show a profit before any IPO. And that doesn't seem likely in the next 12 months.

As for Qantas affiliate Jetstar Asia, its problems are well-documented. After failing to get routes in China and Indonesia it has too many pilots on board and has deferred taking delivery of four new aircraft. Qantas chief financial officer Peter Gregg has said publicly that Jetstar's performance has been disappointing.

The problem for regional budget carriers versus their peers in the US and Europe is that market dynamics in this region are different.

Point-to-point flights tend to be longer than in the US and Europe. And this has an obvious impact on utilisation rates, turnaround times - and ultimately, operating costs.

Also, while the skies over the US and European Union are open, Asian budget carriers depend on bilateral agreements to secure routes. For example, all the Singapore LCCs kicked off with flights to Thailand because Singapore and Thailand have a free skies deal.

But after these easy early pickings, they face an uphill battle getting lucrative routes elsewhere.

A much more immediate problem is fuel costs. While LCCs can keep labour and other operating costs down, fuel is beyond their control. And at US$70 per barrel, it accounts for 35-40 per cent of their total costs, versus 20-25 per cent for full-service carriers.

Analysts say such conditions make consolidation inevitable.

And Valuair and Jetstar may be able to show the others how it can be done. A merger would create an operator with eight aircraft that can offer customers multiple daily flights to eight destinations.

More importantly, there would be economies of scale, especially in utilisation of resources and costs.

At a strategic level, the merger would bring together a player with strong local knowledge and broad regional network and a smaller player with access to a deeper pool of funds.

The only question is whether their corporate cultures can blend. Both have strong personalities at the helm. But the fact that it's these same people who see the merits in marriage suggest that their heads are not in the clouds - and that they can work through the issues.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 30 Jun 2005

Asian national airlines thriving despite LCC challenge

(KUALA LUMPUR) Asia's national airlines will thrive despite growing competition from low-cost carriers (LCCs), some of which will collapse in an expected industry shake-out, according to an industry group.

The national airlines' relatively low cost base in Asia and a focus on lucrative long-haul and premium routes will counter the fare advantage budget carriers have over regional and domestic routes, Andrew Herdman, new director-general of the Association of Asia Pacific Airlines, told Dow Jones Newswires in a recent interview.

The Kuala Lumpur-based association groups 17 Asian national carriers, including Singapore Airlines Ltd, Hong Kong's Cathay Pacific Airways Ltd and Australia's Qantas Airways Ltd.

Mr Herdman said that unlike in the United States, where LCCs often operate for much less than full-service airlines, the cost differential in Asia between premium and no-frills carriers is narrow.

'This may come as a surprise to people who think it's only a matter of time before the no-frills model causes the kind of difficulties (for) the established players the way it has in the US,' he said.

As a result, he predicted, revenue, profit and the fleet size of premium airlines in Asia will continue to grow, while a shake-out of the region's budget carrier industry is likely.

'Full-service carriers will be bigger (in two years) than they are today. Some LCCs will grow, but there will be failures,' he said.

Over the past three years, 15 low-cost airlines have sprouted up in the Asia-Pacific, challenging dominant premium airlines in a region where oceans and the vastness of the area make flying the most suitable way to travel.

Yesterday, Singapore-based budget carrier Valuair said that it is in talks with rival Jetstar Asia on a range of issues. Analysts said the discussions could mark the first of a region-wide consolidation of LCCs.

Mr Herdman said that the latest profits of Association of Asia Pacific Airlines members showed their resilience. Their total net profit is likely to have reached a record high of over US$3.5 billion for the year ended March 2005, about seven times the US$500 million logged a year earlier, he said. In contrast, he added, most budget airlines are still unprofitable except for Australia's Virgin Blue Holdings Ltd and Malaysia's AirAsia Bhd - Asia's only publicly quoted LCCs. - AP

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 02 Jul 2005

Valuair seeking more capital from investors

Reports say it has approached AirAsia chief executive

By VEN SREENIVASAN

EVEN as it negotiates a possible alliance with Jetstar Asia, Singapore-based discount carrier Valuair is seeking more capital from both shareholders and potential new investors.

Valuair's executive vice-president Arthur Lim declined to comment on reports that the discount carrier had approached Malaysian low cost carrier AirAsia, but said that his airline was seeking additional funding.

'We are always looking for equity partners who can add value to our business proposition,' he said. 'But we cannot comment on individual investors whom we are speaking to.'

He declined to reveal how much capital the airline had raised from a recent rights issue to existing shareholders.

Meanwhile, Malaysian media reports said that Valuair had approached AirAsia chief executive Tony Fernandes. The Malaysian Business Times said that AirAsia was 'approached by several of Valuair's shareholders to take up close to a 50 per cent stake in the airline, for RM11.4 million (S$5 million)'.

When contacted by BT yesterday, Mr Fernandes - one of Malaysia's richest men following the airline's RM863 million public offering - was busy offloading baggage from an AirAsia flight from Penang (something which he said he did once a month). But he declined to talk about whether he had been approached by the Singapore-based discount carrier.

Valuair, which has raised almost $40 million from shareholders such as founder Lim Chin Beng, Natasha Foong, Jimmy Lau, Arthur Lim, Asiatravel.com and Star Cruises, is currently in talks with Jetstar Asia for a possible alliance or merger.

Jetstar, which is 49 per cent owned by Qantas, also has its share of problems.

Although it started with a bigger capital base of $100 million, it has had a tough time getting new routes, especially in the potentially lucrative Indonesia and China markets.

Analysts say a merger of the two would create a bigger player with more routes and planes, and a larger market presence.

But how would AirAsia come into this picture?

No one is really sure.

But the Malaysian low cost carrier has been keen to start a Singapore-based venture similar to its associates in Thailand (Thai AirAsia) and Indonesia (Awair). It might be able to achieve this by buying into the privately owned Valuair, say market insiders.

Meanwhile, Valuair has to get its shareholders to approve a marriage with Jetstar. It briefed its shareholders on Thursday about the talks and also extended the deadline for subscription of the rights issue.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 05 Jul 2005

Tiger Airways plans daily flights to Cambodia

SINGAPORE - Singapore Airlines's budget affiliate, Tiger Airways, said on Tuesday it expects to start daily flights to Cambodia soon.

'The flights will start the moment Tiger Airways gets the Cambodian authorities' approval but we can't say exactly how soon because it depends on them,' said William Chia, the carrier's spokesman.

Tiger Airways is one of three Singapore-based budget airlines that started operations last year to capture a slice of the economy travel market, and currently flies to Thailand, Vietnam, Macau, the Philippines and Indonesia.

Soaring fuel costs and intense competition, however, have prevented the carriers from breaking even in the first year and persuaded Tiger's competitors, Valuair and Qantas Airways affiliate Jetstar Asia, to discuss a possible merger.

In a statement, Tiger Airways chief executive Tony Davis called the Cambodian flights 'an important development in the expansion of our regional route network as it gives us more efficiency in the use of our aircraft which will enable us to continue offering the lowest fares'.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Jetstar Asia for Kolkata?

There have been stories of Jetstar starting Kolkata services since last year. Considering the problems that Jetstar seems to be having, chances looked remote. But here is a news article which seems to say that services will start this month.

http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu1&leftindx=1&lselect=1&chklogin=N&autono=193447

Jetstar Airways, is set to launch flights in Kolkata from July, said Arnab Mukherjee, chairman of Indian Association of Tour Operators (IATO), West Bengal chapter.

wow.. how far is kolkata?

i hope that a budget airline would service the phils-HK route.. aside from our own cebu pacific.. to give more competition..

wow.. how far is kolkata?

oh dunno heirloom,like 2-3 hours flight from SG?:)

oh! dkslfa;dskfja i must go there then

heirloom i checked the distances like:)

1785 miles (2873 km) (1551 nautical miles) from Singapore to Calcutta.

1593 miles (2564 km) (1384 nautical miles) from Singapore to Hong Kong

Business Times - 07 Jul 2005

Low fares no big deal for corporate travellers: CWT

Cheap tickets severely restrictive for corporates who need flexibility

By VEN SREENIVASAN

(SINGAPORE) Corporate travellers have not benefited greatly from the competition and price cutting in the Asia-Pacific aviation market. This is because the low fares offered come with severe restrictions, making them impractical for the typical corporate traveller who often has to change his itinerary.

This was among the key findings of a study conducted by global travel management company, Carlson Wagonlit Travel (CWT).

CWT, which specialises in managing corporate travel accounts, found that business class air tickets actually cost 5 per cent more during the first quarter of this year, compared to the same quarter in 2004. However, economy fares fell about one per cent year-on-year during the January-March period.

'In Singapore particularly, airfares for corporate travellers remain mostly unaffected by the pressure of recently launched low-cost carriers,' CWT noted.

'Low-cost carriers have forced incumbents to publish very low fares on certain routes, but these fares come with restrictions unsuitable for corporate usage. Besides, even when net fares were reduced, the cuts were often offset by increases in fuel surcharges.'

Meanwhile, CWT has selected Singapore as its Asia-Pacific operations headquarters.

The decision follows the recent appointment of a Singapore-based chief operating officer, Berthold Trenkel, in January this year.

Mr Trenkel joins CWT from McKinsey & Company's Seoul office, where he co-led the consultancy's travel and logistics practice and oversaw the airline sector in Asia.

Besides Mr Trenkel, CWT has also relocated several other senior officials from its other country locations to its office at Harbourfront Tower here in recent months.

They include its chief financial officer, Olivier Spaenle, who relocated from Sydney; Tyler Lyman, its vice-president for operations, from the USA; and Mike Bezer, regional sales head.

'The Singapore location makes perfect sense, given its infrastructure, business environment and hub status for many multinationals,' Mr Trenkel said.

The travel management company, a leader in the Asia-Pacific region, has the largest wholly-owned global network in corporate travel advisory services.

The Asia-Pacific is its fastest growing market, with revenue growing at a compounded annual rate of over 25 per cent in the last four years. The region accounts for about US$1.2 billion of its worldwide revenue of some US$19 billion.

It employs some 1,900 of its total worldwide staff of 14,000 employees in 25 Asia-Pacific countries.

Mr Trenkel said that rapid business growth had prompted the company to centralise its regional operations in the last few years.

'Last year, we achieved record sales, with business travel sales crossing the US$1.2 billion mark,' he said. 'The growth potential in this region for corporate travel is significant, hence our aim to focus our resources to better serve this market.'

According to CWT, the global travel market is expected to be worth approximately US$800 billion by 2007, and the Asia-Pacific is expected to account for about 25 per cent of this. And one of the fastest growing segments is business travel - an area of specialisation for CWT.

Mr Trenkel said that cross-border business travel was not only seeing strong growth among multinationals, but among small and medium-sized companies. Many, he added, were looking to outsource their travel management to specialist companies like CWT for time and cost efficiencies.

'With our expertise, global footprint, and strong regional network, we are well-placed to grow our business in this region.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.