Price war looms as Tiger offers Thailand for 59 U.S.cents
Price war looms as Tiger offers Thailand for 59 U.S.cents
Bernice Han, Agence France-Presse, Singapore
A price war may be looming in Southeast Asia's growing budget
carrier market after newcomer Tiger Airways announced it was
offering a S$1 (59 U.S. cents) promotional fare to Thailand.
Competitors are confident of holding their own against the
Singapore Airlines-backed no-frills airline, but analysts believe
the industry is in for a major shakeout of fares once the initial
promotional period is over.
"There will be some degree of cannibalization (poaching of
rival airlines' passengers) at the start... but give it a few
more months and airfares will have to sort themselves out," Sim
Kok Chwee, a director with the Bangkok-based Pacific Asia Travel
Association, told AFP.
Tiger Airways announced on Monday that a third of its tickets
to Bangkok, Phuket and Hatyai would be sold for S$1, one way, in
the first week of services. It is the lowest fare of any carrier
in the region.
A return trip will cost S$2, excluding taxes, but the special
rates are available only through the company website
www.tigerairways.com, which began accepting bookings on Tuesday.
"We don't have any specific numbers right now but it has been
overwhelming," the spokesman said of the public's response. "It's
been phenomenally successful."
The promotional fare is available only for the first week of
the carrier's maiden flights to the three Thai destinations,
which are highly popular with Singaporeans and international
tourists.
A Tiger Airways plane will undertake its first commercial trip
on Sept. 15 to the Thai capital. The company will ply the ultra-
competitive Singapore-Bangkok route three times daily.
The route is already being serviced by rival Singapore-based
budget carrier Valuair and Malaysia's AirAsia. Full-service
carriers Singapore Airlines and Thai Airways are also plying the
route intensively.
On Sept. 22, Tiger will start its daily service to the
southern town of Hatyai, followed by the resort island of Phuket
a week later.
One more Singapore-based budget carrier, backed by Australia's
Qantas and still not commercially branded, is set to launch
services within the year to compete with Tiger Airways, Valuair
and Air Asia.
Valuair said it welcomed the rivalry and was confident of
holding its ground.
"We welcome competition which will help to grow the industry.
More jobs will be created and more tourists will come to
Singapore," spokesman Nilesh Pritam said.
"More importantly, once the hype is over, travellers will
start making considered judgments about the airlines they want to
fly with," he said.
A check with Valuair's booking website showed the carrier is
offering a two-way return ticket to Bangkok for S$138. Seats on
Valuair's Singapore-Bangkok routes are on average 75 percent
taken up, Pritam said.
Unlike its main rivals, Valuair offers passengers light meals
with refreshments, a 20-kilogram (44 pounds) baggage allowance
and assigned seating ahead of boarding the plane.
SilkAir, the wholly-owned regional wing of Singapore Airlines
unit that flies to 25 destinations including Phuket, told AFP
that passengers can expect discounts of up to 40 percent during
promotions on selected routes.
"We have in the past and will continue to offer value for
money flights across our network," said a spokeswoman for
SilkAir, which is not regarded as a budget airline because it
offers meals and other normal services.
A round trip to Phuket on SilkAir is currently priced at 130
dollars, she said.
AirAsia declined to comment on Tiger Airways' S$1 fare when
contacted.