Singapore Airlines is likely to target markets in India, China and Australasia with its new no-frills long-haul airline to be launched next year.
The unnamed venture will operate independently from Singapore Airlines and be given a distinct branding. It will run along similar lines to Qantas’s Jetstar subsidiary, the budget airline which now contributes a third of the Qantas Group’s annual profit. It is thought that Singapore Airlines has Jetstar in its sights with the new venture, but is also aiming at Malaysia’s Air Asia X and Middle East carriers such as Emirates, which have picked up the bulk of new traffic from Asia.
Singapore Airlines has confirmed that its new venture will operate wide body aircraft, which are most likely to be surplus Boeing 777-200s from its own fleet. It is unclear whether the new airline will offer a premium cabin option as Air Asia X has done.
Singapore Airlines has been effectively been forced into starting a subsidiary because its mainline operation is not growing. Last year, Singapore Airlines carried 16.6 million passengers, compared with 19 million in 2007/8. In the same period, Singapore’s Changi airport grew numbers from 36 million to 44 million.
Qantas recently said that its expansion plans would centre on Jetstar and that opportunities for the mainline Qantas brand were limited. It is rumoured to be considering the launch of an Asia-based budget long-haul brand and Singapore Airlines’ announcement may have pre-empted this.
Singapore Airlines’ chief executive Goh Choon Phong said: "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.
"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."
The new airline’s name, livery and destinations will be unveiled later this year.