AirAsia shelves Singapore plans after licensing delay

AirAsia shelves Singapore plans after licensing delay

Deutsche Presse Agentur, Singapore

Malaysia's AirAsia has shelved plans to start a budget airline in Singapore after rivals were given licenses first although AirAsia applied earlier, Southeast Asia's largest no-frills carrier said on Wednesday.

"No one in Singapore ever replied to us (about the air operator's certificate), so we take it as Singapore did not want AirAsia," chief executive Tony Fernandes told the daily newspaper Streats.

"So we have taken our investment elsewhere," he added.

AirAsia recently entered the Indonesian market, buying defunct airline PT AWAir for a token US$2.

The carrier had applied for an air operator's certificate (AOC) in January. Fernandes said then its Singapore carrier would initially use two Boeing 737 aircraft to operate between 18 and 32 daily flights to six regional destinations.

Tiger Airways, owned by Singapore Airlines, the government's investment arm Temasek Holdings, the founders of RyanAir, and a U.S. partner, started operations last month. It applied for the license in March.

Qantas-backed Jetstar Asia expects its licence early next month after handing in its application paper after AirAsia.

The Civil Aviation Authority issued a statement saying it "prioritized the process of the various AOC applications based on the value-add and benefits the potential carrier can bring to Changi Airport and Singapore."

AirAsia has been building up its hub in Johor and currently operates 63 flights a week. The carrier launched Malaysia's biggest IPO for this year last week, aimed at raising $272 million to fund regional expansion.