By Ernie B. Calucag
Competition among Singapore-based low-cost airlines heats up as Tiger Airways and Singapore Airlines’ Scoot are lining up to launch new routes, seeking to gain an upper hand in this growing aviation market segment.
Tiger Airways said Tuesday that the Indonesian Director General of Air Communications had reactivated the air operator’s certificate of Indonesia’s PT Mandala Airlines, in which Tiger has a 33 per cent investment.
“Information regarding the number of aircraft, the initial routes and destinations for Mandala will be announced soon. The resumption of flights is scheduled for April 2012,” Tiger said in a statement.
Mandala Airlines’ clearance to fly culminated a year of financial restructuring after the carrier was grounded in January 2011 due to its enormous debt.
Mandala Airlines – which was owned by the Indonesian military until 2006 when private investors took over – will adopt Tiger Airways’ low-cost carrier model and will use Airbus A320 aircraft in its fleet.
It aims to fly within Indonesia and to international destinations within a five-hour flying radius.
With the approval, Tiger Airways should be able to tap into Indonesia’s potential for inexpensive domestic and international travel while taking up slack from its Australian operations after safety and leadership setbacks.
The move could bring it head-on with Air Asia which offers a dozen routes to Indonesia.
The Malaysian-based budget carrier is now setting its sights in Singapore. In a recent interview, Air Asia CEO Tony Fernandes said he wants to make Singapore a regional hub for his low-cost airline alongside Malaysia, Indonesia, Thailand, the Philippines and Japan.
“I think if AirAsia came to Singapore, it will be good for Singapore” he said. Fernandes added that Air Asia is also working to win approval to fly India, China and Myanmar.
Beyond Asia, the airline’s long-haul unit AirAsia X plans to resume flights to London and Paris within the next four years, after pulling out over the EU’s carbon tax on airlines.
Meanwhile, Scoot announced Tuesday that it plans to fly to at least five cities by the end of the year as the group adds long-haul budget services to compete with Jetstar and AirAsia X.
“Scoot intends to announce destinations in China and Japan,” said CEO Campbell Wilson in a Bloomberg interview.
The carrier, which is due to start flights in June or July, has already said it will fly to Sydney and the Gold Coast in Australia.
Singapore Airlines is forming Scoot after low-cost carriers won 26 per cent of passenger at its Changi Airport home, contributing to waning load factors and declining profit.
Shares of Tiger Airways rose 3.2 per cent Tuesday to S$0.805 while Singapore Airlines gained 0.27 per cent to S$11.0 per share.
