Cathay Pacific Airways is looking at setting up a low-cost airline subsidiary as one way of responding to a flurry of activity in the budget airspace during the past few months. Hong Kong's No1 airline is keeping an increasingly watchful eye on low-cost start-ups in Australia, Malaysia, Singapore and Thailand and to assess the feasibility and impact of the budget model in Asia, according to corporate development director Tony Tyler. 'We will do something to respond to what is going on in the market,' Mr Tyler said. '[Launching a low-cost carrier] is just one of the options we are looking at - but it is too early at this stage to say what we will go for.' Cathay, which has spent decades and countless millions honing its status as a premium carrier, was now assessing how to respond to the global low-cost phenomenon which had spurred strong regional activity of late, he said. Low-cost carriers have popped up across Asia in the past year, but analysts say the one that would have caused the biggest stir in Swire corridors is the emergence of Tiger Airlines in Singapore last month. The carrier, which plans to launch in the second half of next year, is 49 per cent owned by Singapore Airlines, 11 per cent by state-owned Temasek Holdings with the remainder held by Ryanair founder Anthony Ryan. The Irish carrier, founded in 1985, has taken Europe by storm. 'Low-cost travel is taking off, literally, all over the world, and I'm sure it will be extraordinarily successful out of [Singapore],' Mr Ryan told the Asian Wall Street Journal last week. He said low-cost airlines would control about 10 per cent in the intra-Asia passenger market by as early as 2014. Mr Tyler said competing in a low-cost environment would not be totally foreign to Cathay. 'Cathay Pacific, like other existing carriers in Asia, sells seats at some very low prices in all our markets. So we are used to competing at this end of the price spectrum,' he said. 'There is some actual demand [for low-cost carriers in Asia] and some potential for future demand. So it is something we have to be seriously looking at.'