Singapore Airlines has announced that it is to start up a budget long haul carrier. They are likely to be ready to start taking on passengers within the year. The airline will own most of the company but it will be managed independently bythem.
Plans are for the carrier to fly routes that are over five hours long and therefore it will be in competition with companies such as AirAsiaX which belong to Malaysia’s AirAsia Company and Jetstar airways who are Quantas low budget branch.
The company is yet to be named but they feel that it will help to stimulate demand for long haul flights in the budget travel market which is something which has happened in the short haul market in Asia recently. They feel it will provide a significant opportunity for growth for their company. They are not abandoning the rest of the company either, as this new branch will not compete against their current businesses. Further details including the name, management team and routes will be be announced later.
They will use Singapore Airline fleet to start with and then make further decisions with regards to long term fleet in the future. Their competition in AirAsia has reported on their Twitter site that he is not worried about the new business, in fact he says they should be worried as he feels they should not be trying to enter a market they know little about. It is unlikely that the company will be a failure though as SIA has done extensive research and are a well established company.