Thai Airways mulls forming LCC without Tiger Airways

Singapore
Source:
This story is sourced from Pro
See more Pro news »

Thai Airways is considering going ahead with plans to start up a low-cost carrier without potential partner Tiger Airways.

The airline had signed a memorandum of understanding with the Singapore-based low-cost carrier in August 2010 with the aim of starting up a Bangkok-based joint venture by the first quarter of 2011.

Thai Tiger, however, has been stuck in limbo in Bangkok with the government failing to give regulatory approval despite several rounds of talks.

Industry sources said that the previous Abhisit Vejjajiva government, which lost Thailand's general elections in July, had been opposed to the plan. The new Yingluck Shinawatra government is perceived to be more pro-business, but there has been little movement on the proposal since her government took office two months ago.

With the Thai-Tiger MoU expiring at the end of September, it is still not clear if the plans will go ahead and there are suggestions that the two sides could walk away.

"It would be nice if we did go ahead with Tiger as they have a functioning business, a plan and the aircraft that we need. Tiger is still our preferred partner," said Raj Tanta-Nanta, Thai's vice-president for investor relations.

A senior official at Thai, however, said that the Star Alliance member is prepared to go ahead without Tiger if necessary.

"We are about to have talks with Tiger on whether we should continue with the MoU. We want a low-cost carrier to take on Thai AirAsia. It would be ideal to do this with Tiger, but not absolutely necessary," said the official.

"To be honest, we are getting pissed off that this is unnecessarily dragging on. We don't know if the opposition to the deal is because of Tiger, but there are some in Thai who feel that it may be better to go ahead without them. There have been some discussions on this, and it is gaining momentum within the company."

Tiger said in a 19 September statement that it is still waiting for news about the joint venture.

"The company has been informed by Thai's management that there has been no progress in the regulatory approval of the Thai Tiger project and there is therefore no change in the status of the Thai Tiger project," said the airline.

"Thai's management has also clarified that there was no discussion on Thai Tiger at Thai's board meeting on 16 September 2011. The company will review its position with regards to this project and make further announcements as appropriate."