China Airlines is "seriously considering" if it should enter the low-cost airline business either via its Mandarin Airlines subsidiary or through a brand new entity.
If the Taiwanese carrier opts for the latter, it could also start up the new airline through a joint venture with an established low-cost carrier, says its president HH Sun.
Taiwan remains a white spot for low-cost carriers in Northeast Asia. Three Japanese low-cost carriers began operations in the last year, there are some smaller low-cost carriers in South Korea and Spring Airlines remains the only carrier that operates using that model in China.
"There are a lot of new low-cost carriers in the region to a liberalised market and many are flying to Taiwan. That means we have to seriously consider if we need a low-cost carrier too," says Sun.
He adds that the competition between full-service carriers and low-cost carriers in Taiwan has to be fair, and much of it hinges on government policy. He points out that there has to be greater transparency when it comes to fares, especially if low-cost carriers publish only the base price.
Airports' operations must also become a bit more flexible, and a study could be done on whether the curfew at Taichung and Kaoshiung could be either relaxed or lifted in order to provide greater aircraft utilisation.
"How can we have proper utilisation when the airport is closed one-thirds of the time? This has to be improved. The requirements of the low-cost carriers are different from those for the network carriers and the policies must be adjusted."