Singapore Airlines to set up new low-cost carrier

Singapore Airlines will set up a new no-frills low-fare airline to tap the medium and long-haul market, the airline announced on Wednesday.

"As we have observed on short-haul routes within Asia, low-fare airlines help stimulate demand for travel, and we expect this will also prove true for longer flights," said Singapore Airlines Chief Executive Officer Goh Choon Phong.

The company said that the new airline is being established following extensive review and analysis and that the operations of the new airline will begin within one year.

The new airline will be a wholly-owned subsidiary but will be operated independently and managed separately, Singapore Airlines said, adding that more details such as branding, products and services as well as its route network will be announced by the new airline's management in due course.

The company said it intended to use wide-body aircraft on the medium and long-haul routes, adding that "it will enable the SIA Group to serve a largely untapped new market and cater to the growing demand among consumers for low-fare travel."

Low cost carriers have been booming in recent years in areas including southeast Asia, accounting for about a quarter of the passenger traffic at Singapore's Changi Airport, according to latest statistics released for the month of April.

"We are very excited about what our new low-fare subsidiary will offer to consumers. We are seeing a new market segment being created and this will provide another growth opportunity for the SIA Group," Goh said.

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