Singapore Airlines (SIA)a five-star premium airlines has surprised the aviation industry by announcing plans to set up a wholly-owned low-cost carrier that will ply medium and long-haul routes in a year's time.
SIA said it had intentions to set up a new no-frills low-fare airline operating wide-body aircraft which will be operated independently and managed separately from SIA.
The Singapore carrier like other premium airlines in the region is facing intense competition, including from budget carriers, and the move may be its way of positioning itself to take advantage of the growth in air passenger traffic expected in Asia in the coming years.
In a statement issued yesterday, SIA said the new airline was being established following extensive review and analysis and it would enable the SIA group to serve a largely untapped new market and cater to the growing demand among consumers for low-fare travel.
SIA is not new in the low-cost game as it already owns a third of Singapore-based budget carrier Tiger Airways. It also owns regional carrier SilkAir. Tiger mostly flies within five hours of Singapore 's Changi airport while SilkAir flies to a slightly more upmarket set of regional destinations.
Analysts are saying the new airline will compete with Asia's largest low-cost carrier, AirAsia, and its long-haul low-cost sister airline, AirAsia X, besides Australia 's Qantas low-cost unit, JetstarAsia.
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