Two new Asian LCCs to emerge from joint ventures

Two new low-cost carriers will emerge in Asia next year, following a series of joint venture deals between the region’s carriers.

Thailand’s Nok Air and Singapore’s Scoot have signed a Memorandum of Understanding (MoU) to establish a new airline called ‘NokScoot’, which will be based at Bangkok’s Don Mueang International Airport.

Clockwise (from top left): China Airlines, Nok Air, Tigerair and Scoot are all spreading their wings across Asia
Clockwise (from top left): China Airlines, Nok Air, Tigerair and Scoot are all spreading their wings across Asia

And Tigerair has sealed a new joint venture with China Airlines that will see the creation of a new Taipei-based budget carrier called Tigerair Taiwan.

NokScoot will feature a similar business model to Scoot, operating wide-body aircraft on medium- and long-haul international routes. Nok will hold up to 51% in the new carrier, with Scoot taking the remaining 49%. Initial investment in the airline will be THB2 billion (US$62 million).

“We are excited at the prospect of expanding Nok’s presence overseas, and to be doing so with the assistance of Scoot. It has always been Nok’s goal to offer Thais more choice and more value, of which this venture is yet another example. We’re also excited at the opportunity to encourage more inbound tourists, to boost the Thai economy,” said Nok Air’s CEO, Patee Sarasin.

Meanwhile Tigerair Taiwan will be independently managed, with Tigerair holding 10% of the new carrier. With initial capital of approximately TW$2bn (US$67m), the new carrier will primarily operate short-haul routes to destinations in Northeast Asia. It will become the fifth Tigerair-branded subsidiary, following existing units in Singapore, Australia, Indonesia and the Philippines.

“We are delighted to forge this partnership with China Airlines. The new JV will allow us to extend our presence into the new, untapped markets of Taiwan, Japan, and Korea,” said Tigerair’s Group CEO, Koay Peng Yen. “There is vast potential for growth in these markets and also areas of synergy to be explored between the two airlines. With an established partner in China Airlines, we are confident of building a strong and sustainable budget carrier.”

NokScoot will mainly complete against AirAsia’s new Bangkok-based medium- and long-haul unit, Thai AirAsia X, while Tigerair Taiwan becomes the second new Taiwanese LCC to be formed in recent weeks, following the announcement of TransAsia Airways’ new budget carrier.

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