AirAsia plans budget airline in S'pore

SINGAPORE - AirAsia is reported to launch a new no-frills airline in Singapore to tap the lucrative Singapore-Kuala Lumpur route, possibly in a joint venture with a local partner.

Air Asia's CEO Tony Fernandes told a local daily plans to start a Singapore operation are at 'an embryonic stage'.

It is understood the Singapore operation would replicate the Thai deal (edaily, November 12).

Aviation analyst Peter Harbison, who heads the independent Centre for Asia Pacific Aviation told local paper Business Times that the Singapore-KL route is ideal for a low-cost carrier to operate and that Singapore Airlines and Malaysian Airlines, the two carriers currently controlling the short route, would - with their higher overheads - find it tough to compete against a budget model, and would be forced to cut fares.