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Tigerair Taiwan-China Airlines LCC JV to Take Off in Q4, 2014

2013/12/23 | By Steve Chuang

Tigerair Taiwan, a low cost carrier (LCC) jointly established by Taiwan's China Airline Ltd. and Singapore-based Tiger Airways, is scheduled to take off in the fourth quarter of 2014, regarded as the Taiwanese airline's entry to the potentially lucrative segment.

At a press conference held in mid-December, China Airline confirmed that Tigerair Taiwan will be set up in the terminal at Taoyuan International Airport in the fourth quarter of 2014 with three brand new A320 jets initially to fly between cities across East Asia, with tickets  to be priced from only about NT$230. Then, the LCC's fleet will be expanded to 12 aircrafts three years later, when it will likely become profitable.

The jointly founded LCC will have paid-in capital of NT$2 billion, with a 90% stake owned by China Airline, Taiwan's largest airline by fleet size, and the remainder by Tiger Airways, founded in 2004 and now Singapore's biggest LCC by market share. Three years later after the joint venture becomes operational, the stake held by the Singaporean party will increase to 33%.

Sun Hung-hsiang, China Airline's chairman, noted that it is opportune for his company to venture into the segment for budget flights through the joint venture, given that air transport markets worldwide are increasingly more accessible; and the Singaporean partner is willing to provide technological support. Another factor that drives Sun's confidence in growth potential of the LCC is Taiwan's location as the geographical hub in East Asia, which connects the island with all major cities across the region within 4-hour flights to enable budget airlines to prosper.

Koay Peng-yen, CEO of Tiger Airways, which has enjoyed promising growth in Singapore, Australia, Indonesia and the Philippines, emphasized that the partnership will enable his company to better explore uncharted territories of the discount flight market in Taiwan, Japan and Korea with help from China Airline, which commands over 30% of the Taiwanese air transport market. (SC)