Thai and Tiger form Bangkok-based low-cost airline

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Thai Airways International and Singapore-based Tiger Airways have agreed to form a new low-cost carrier based in Bangkok.

The new airline, to be called Thai Tiger Airways, will start operations in the first quarter of 2011 pending regulatory approval, say the two carriers after signing a memorandum of understanding.

It will operate domestic and international flights within a five-hour flying radius out of Bangkok's Suvarnabhumi Airport using Airbus A320 aircraft.

"The route network and further information on the corporate structure will be announced in due course," say the airlines.

Thai, and an undisclosed Thai entity, will hold a 51% stake in the new carrier while Tiger will own the remaining 49%, says Thai's president Piyasvasti Amranand.

"We believe that this move will provide revenue opportunities for Thai, and allow Thai to be more competitive in the region with the anticipated growth in the low cost market," he adds.

This growth will come from the Association of South-east Asian Nations' [Asean] air liberalisation policies, which will come into effect by 2015 and should help grow air travel in Asia, says Piyasvasti.

Thai will hold the chairmanship on the new airline's board, which will have three nominees from Thai and two from Tiger.

Tiger's group president and CEO Tony Davis says: "Thai Tiger will be well positioned to offer low fares to even more parts of the Asia-Pacific region from its base in Asia's tourism leader, Thailand. Bangkok is a key gateway to the whole of Southeast Asia and from its base at Suvarnabhumi Airport. Thai Tiger will be well positioned to also serve destinations in North Asia and the Indian sub-continent."

Tiger, in which Thai's fellow Star Alliance partner Singapore Airlines has a 34% stake, which was established in 2004. It has a fully-owned subsidiary in Australia offering domestic services, and Bangkok will be its third base.

It had plans to set up associate carriers in South Korea and the Philippines a few years ago, but dropped those citing the economic downturn and regulatory uncertainty.

Malaysian low-cost rival AirAsia has Bangkok-based associate, Thai Air Asia, which operates both domestic and international services.

Thai's low-cost subsidiary, Nok Air, also operates flights out of Bangkok but from the smaller Don Mueang Airport.