Singapore - Taiwan's China Airlines and Singapore budget carrier Tigerair said on Monday that they would set up a new no-frills airline to tap into the growing demand for cheap travel in Asia.
Tigerair Taiwan will have a paid-up capital of about $67.5m with the Singapore-based carrier holding a 10% stake, the two airlines said in a statement.
China Airlines, Taiwan's leading airline by fleet size, will hold the remaining 90%.
Tigerair said in the statement the new airline would be managed as a stand-alone entity but would utilise its website as well as sales and distribution platforms.
"The new JV (joint venture) will allow us to extend our presence into the new untapped markets of Taiwan, Japan and Korea," said Koay Peng Yen, group chief executive of Tigerair.
Expansion opportunities
The formation of the new carrier comes just a month after TransAsia Airways, Taiwan's first private airline, secured government approval to set up a so-far unnamed budget subsidiary.
Demand for discount flying has been rising in Asia. Currently 12 foreign budget airlines, including Malaysia-based AirAsia and Japan's Peach Aviation, offer services to and from Taiwan.
Singapore's Tigerair, which was previously known as Tiger Airways before a rebranding exercise this year, has been looking for expansion opportunities in Asia.
It bought a 33% stake last year in beleaguered Indonesian carrier PT Mandala Airlines. It raised more than $237m in March to fund its Asian expansion plans.