AirAsia Philippines, a low-cost carrier based in Manila, is scheduled to start regular flights to Taiwan starting from November.
AirAsia Philippines, an affiliate of AirAsia, a low-cost airline based in Malaysia, is planning to kick off its services between Manila and Taipei on Nov. 1 with seven flights a week.
In addition, the Philippine carrier, which is a joint venture between three Filipino investors and AirAsia International Ltd., will provide three flights between Taipei and Cebu a week, starting on Nov. 4.
Meanwhile, Hong Kong Express Airways, a low fare airline based in Hong Kong, is planning to launch regular flight services between Hong Kong and Hualien, eastern Taiwan, on Dec. 6, with three flights a week.
Currently, Hong Kong Express provides regular flights between Hong Kong and Taichung, central Taiwan.
At present, a total of 19 budget carriers operate in the Taiwan market after V Air (??), a subsidiary of Taiwanese mid-sized international carrier TransAsia Airways (????) ended its services on Oct. 1, as a result of massive losses.
In Taiwan, only one Taiwan-based budget airline -- Tigerair Taiwan, a joint venture with Tigerair Singapore and Taiwan's China Airlines (CAL, ??) -- remains operational, but it is struggling financially, while the other 18 competitors are foreign based.
CAL Chairman Ho Nuan-hsuan (???) confirmed that the parent company has set up a task force to study the future of Tigerair Taiwan. The joint venture agreement between Tigerair Taiwan and Tigerair Singapore is scheduled to expire in April 2017.
With the arrival of AirAsia Philippines, the number of low-cost carriers operating in Taiwan will be 20, indicating that the closure of V Air has not deterred foreign budget carriers from entering the Taiwan market.
V Air launched its services in December 2014 after Tigerair Taiwan was launched three months earlier. Both eyed the booming budget carrier market, but V Air posted accumulated losses of about NT$900 million (US$28.57 million) and Tigerair Taiwan ran up losses of about NT$1.1 billion in less than two years, with the losses more than half the two carriers' paid-in capital.
The budget airline business in Taiwan has continued to grow since budget carriers first began operating locally in 2004. In 2015, budget airlines transported 4.7 million passengers, almost 13.5 percent of the total number of passengers handled by carriers operating in Taiwan, up from about 3 percent in 2012.
However, the losses incurred by V Air and Tigergair indicate that Taiwanese budget carriers are unable to compete with their foreign counterparts.
Yeh Wei-chien (???), an associate professor in Kainan University's Department of Air Transport, said that the operating costs of locally based budget carriers have been higher than those of their foreign counterparts due to their relatively smaller size.
Market sources have expressed concern about the future of Tigerair Taiwan because if the only remaining Taiwanese budget carrier closes, the local low cost airline market will be dominated by foreign players.
Source: Focus Taiwan News Channel