Taiwan airlines join budget race amid shift in demand
China Airlines and TransAsia look to offer discount services as travellers increasingly opt for the restrictive cost savings of no-frills carriers
Two Taiwanese airlines that are playing catch-up in the island's budget flight market are banking on a shift in local passengers' attitudes to discount travel to keep their ventures competitive against 13 foreign rivals that are already offering cut-price services to Taiwan.
The budget newcomers - flagship carrier China Airlines and TransAsia Airways - have been monitoring market demand and have observed a shift in passenger preferences from the costly flexibility of full-service operators to the restrictive cost savings of no-frills carriers.
[Taiwanese carriers] see that there’s money so now they want to come in
"Some foreign budget airlines are starting to use this market and Taiwan itself doesn't have one," said Fang Chia-wen, the public relations chief at TransAsia, the island's oldest airline. "There's a demand, so we applied for a licence."
TransAsia got the licence from the island's aviation regulator six months ago and is looking to start services towards the end of this year.
China Airlines would start budget services through a partnership with Singapore-based Tigerair, the parties said in a December 16 statement. The Singaporean carrier will take a 10 per cent stake in the venture, which will be based locally with paid-up capital of NT$2 billion (HK$518 million).
The venture, known as Tigerair Taiwan, would operate as a no-frills carrier on international routes in Northeast Asia where the Singaporean airline wanted to expand services, the statement said, forecasting flights to Japan and South Korea. Neither side would discuss proposed fares.