Making a foray into the budget airline market: China Airlines to announce by the end of the year

As budget airlines send shockwaves through the market, China Airlines Chairman Sun Hung-hsiang said recently that China Airlines is about to become the first airline from Taiwan, China to compete in Asia's budget airline market, and that it will unveil related plans as early as the end of the year.

Sun Hung-hsiang recently gave an exclusive interview to The Wall Street Journal (WSJ). According to the report, China Airlines will follow most Asian airlines, including Singapore Airlines Ltd. and Japan Airlines Co., in making a foray into the budget airline market, in order to respond to the formidable competition from emerging budget airline operators in Asia.

The report noted that budget airlines currently account for 1/4 of air transport in the Asia-Pacific region.

Sun Hung-hsiang said he expects the budget airline market in Northeast Asia to accelerate its growth, mainly thanks to further liberalisation of the aviation industry in Northeast Asia, such as the new open skies agreement signed between Taiwan, China and Japan.

In his exclusive interview with the WSJ, Sun Hung-hsiang revealed that China Airlines will therefore build its own budget airline to take on other competitors.

However, Sun Hung-hsiang declined to disclose the related investment plans underway, or whether the plan involves the transformation of one of China Airlines' existing subsidiaries, or a partnership with other investors.

Sun Hung-hsiang said he does not expect explosive growth from the outset, but does not want to be absent from the budget airline market.