News

Thai Tiger Airways launch likely to be delayed

25 Oct 2010

Thai Tiger Airways (TTA), the low-cost collaboration between THAI Airways and Tiger Airways, may be delayed a second time if negotiations between the two entities and opposition from Thailand’s transport ministry are not resolved.

The original January 2011 take off was recently moved to March 2011, but seems in danger of being delayed by another two months, according to Ampon Kittiampon, THAI chairman. He said both airlines were threshing out the financial details to ensure that TTA’s business model was economically sound and competitive.

The transport ministry is also questioning the legality of TTA’s creation despite reports that the joint venture has the blessing of Prime Minister Abhisit Vijjajiva.

TTA was conceived to stem the eroding market share experienced by THAI Airways and its domestic subsidiary Nok Air in recent years, Piyavasti Amranand, THAI president, told journalists attending a conference in Bangkok last week to mark the airline’s 50th Anniversary.

Budget travel pioneer AirAsia, through its subsidiary Thai Air Asia, has been aggressively growing scheduled domestic and international flights from Bangkok and other cities in Thailand.

Amranand, however, believed there is business for all, saying: “The market potential in Asia is enormous; there are millions of people here who have never flown before.“It is critical that we try to capture that segment of the business.”

Amranand said that TTA would go head-to-head with Thai Air Asia, targeting the “ultra low-end sector by offering cheap ticket prices”.

He also emphasised that THAI, despite its involvement in TTA, would treat it as a completely different entity. “There will be no integration with THAI or Nok Air, no code sharing at all as TTA’s flights will be point to point. We need to distinguish between the brands so as not to destroy them.”

Airbus A320s on lease will be used for TTA’s operations, Amranand said.

He added that Nok Air was not considered for THAI’s new enterprise “because it was not a low-cost carrier”, adding that Tiger Air had “the best expertise” for the job.

Declan Ryan, principal of Ryan Air, a shareholder of Tiger Airways, agreed with THAI officials about the bright future of low-cost carriers in the Asia-Pacific. He said LCC penetration in the region was still quite low at 15.5 per cent compared with the global average of 21.7 per cent and 36 per cent in the EU.

For more about THAI, visit www.thaiairways.com

Margie T Logarta

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