China Airlines partners with Tigerair to develop budget airline business

According to foreign media reports, China Airlines and Tiger Airways Holdings Ltd. will cooperate to establish a budget airline in Taiwan, China.

The two airlines stated separately in announcements that China Airlines will hold 90% equity in the joint venture, with the remaining equity held by Tigerair. Singapore-based Tigerair stated that the new joint venture budget airline will be named "Tigerair Taiwan," with capital reaching NT$2 billion (US$67 million).

Tigerair joins AirAsia Bhd. and Qantas Airways Ltd.'s Jetstar in establishing low-cost airlines over the past year. According to data compiled by Bloomberg, low-cost airline traffic in Asia has tripled since 2008.

"Taipei Times" cited the Civil Aeronautics Administration (CAA) as reporting that two budget airlines are expected to begin operations next year, including Tigerair Taiwan and an airline affiliated with TransAsia Airways.

Tigerair President Koay Peng Yen stated in the announcement, "The new joint venture will allow us to expand into new and untapped markets in Taiwan, China, Japan and South Korea."

In addition, Singapore Airlines Ltd.'s budget carrier Scoot is reported to be planning to establish a Bangkok-based low-cost airline with Nok Airlines PCL of Thailand. According to statements from Scoot and Nok Airlines, the initial investment will reach 2 billion Thai baht (US$62 million), with Nok holding 51% equity and Scoot holding 49%.

According to data compiled by Bloomberg, Singapore Airlines is Tigerair's largest shareholder, holding 33% equity.