Singapore low-cost carrier Tiger Airways is establishing a low-cost airline at Seoul Incheon International airport in joint-venture partnership with the Incheon Metropolitan City government and the new carrier could be a boon for Macau airport and the Philippines' Clark airport.

Tiger chief executive Tony Davis and the mayor of metropolitan Incheon, Ahn Sang-Soo, have signed a letter of co-operation to establish at Incheon airport a low-cost carrier called Incheon Tiger Airways.

Tiger will have 49% and the municipal government will have a 51% stake, although the mayor says his government will later reduce its stake by selling some shares to South Korean investors, possibly logistics companies and financial institutions.

Davis says they will now apply for an air operator's certificate, and "we are targeting to start flying within the next 12 months". He says the mayor "has already asked me if we can start flying before the August 2008 Beijing Olympics".

He adds: "We are looking to base five [Airbus A320] aircraft there to begin with at Incheon and we will probably grow that to 10 aircraft," says Davis.

It will operate domestically as well as internationally: to China, Japan, eastern Russia, Mongolia and the Philippines, he says.

Davis declines to say which routes it will serve, but says Incheon Tiger can link with Tiger in Singapore through Macau and the Philippines airport of Clark. Tiger already operates from Singapore to these two points. He says Tiger's move into South Korea is significant because currently no major low-cost carriers operate in South Korea, so it gives Tiger "first mover advantage".

He also says South Korea has a good domestic market and Seoul Incheon is a good international hub for north-east Asia as it is located between China and Japan.

Davis declines to say if a Korean will be the airline's chief executive, but he says he wants to bring in some foreign talent to ensure the carrier meets international benchmarks.

Ahn, meanwhile, says his government is investing in a low-cost carrier because it wants to reinforce Incheon's position as north-east Asia's hub.

Korean Air disclosed in June that it plans to establish a low-cost carrier within the next three years, but Ahn downplays the significance of this.

"I don't think sothey are not seriously looking at having a low-cost carrier for now." As a consequence, "we need to speed it up", says Ahn.

Source: Flight International