EWL
Here's an article that is along the lines you suggested:
ValuAir to model itself after America's JetBlue
It wants to be somewhere between budget and premium
By VEN SREENIVASAN
(SINGAPORE) ValuAir will be modelled after US discount airline JetBlue, and not the budget carrier model made famous by Europe's Ryanair.
Mr Lim: ValuAir's tickets will be 40 to 50 per cent cheaper than those of mainline network carriers
Speaking to the media after inking a deal to lease two new 162-seat A320 aircraft with Singapore Aircraft Leasing Enterprise (SALE), ValuAir chairman Lim Chin Beng said that Singapore's first low-cost carrier will position itself - both in terms of service and pricing - between regional full service network carriers and the budget carriers.
'We studied whether the European budget model can be replicated in Asia,' he said. 'In Europe, LCCs serve short-haul domestic routes of about one to two hours. But in Asia, the international flights can be between three and five hours. In Europe, you can compete on price. But in Asia, price is not everything. More legroom, inter-lining capabilities, seat allocation and longer turnaround can sell.'
Mr Lim said ValuAir's tickets will be 40 to 50 per cent cheaper than those of mainline network carriers and will be pegged at the average fares on budget carriers.
'Our fare structure will be very competitive compared with the Ryanair-type budget carriers. And it will be completely transparent, with no range.'
Tickets will be sold via the Internet and through agents.
Besides having wider 32-inch leather seats (compared with budget carriers' 29-inch seats), ValuAir will also serve passengers flying to its planned destinations of Bangkok, Jakarta and Hong Kong light refreshments.
The company is waiting to get its Air Operator's Certificate (AOC).
Mr Lim said ValuAir, with breakeven load factor of about 60 per cent, will not need a low-cost terminal at Changi Airport.
'We want passengers to have aerobridges, and our turnaround time will be an hour as we intend Changi to be our hub for interline transfers,' he said.
'We also envisage carrying cargo, which could increase our revenue by 8 to 10 per cent.'
Mr Lim's main partners in the venture are his son, Arthur Lim, the director of customer service consultants Resource Planning Development Pte Ltd; Natasha Fong, former vice-president of EDB Investments; and Jimmy Lau, the former president of Reed Exhibition Singapore and ex-managing director of Asian Aerospace Pte Ltd.
Each of them own just under 12 per cent of the company.
The major shareholders include Asiatravel.com, Blu Inc Group, Khattar Holdings and Wulthelam Holdings.
To-date, ValuAir has raised some $33 million in capital, and could raise more via private fund-raising in future.
It has recruited 80 staff, including 42 cabin crew and 18 pilots (mostly from the now-defunct Ansett Australia airlines).
Mr Lim acknowledged rumours that Singapore Airlines group had applied for all available traffic rights to Hong Kong and Jakarta ahead of ValuAir's launch.
'But I hope it will not be all given out,' he quipped. 'I hope some will be reserved.'
He added that unlike SilkAir, which flies to 'exotic destinations', ValuAir would concentrate on key regional cities.
The company plans to lease two more A320 aircraft after a year, thus enabling it to expand its routes to new destinations like Perth, southern China and even India.
SALE boss Robert Martin pointed out that ValuAir was his company's first local customer. Sale, which had ordered 51 planes from Airbus, has taken delivery of 31 aircraft so far. And ValuAir's planes will arrive next month, in time to take to the skies by May.
Hot on ValuAir's tail is likely to be budget carriers Singapore AirAsia (which applied for its AOC this month) and SIA's budget associate, Tiger Airways.
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Fri "Straits Times"
Tiger's new CEO has no aviation experience
Patrick Gan's impressive experience is in pharmaceuticals; analysts say having an 'outsider' head the carrier is a good move
By Goh Chin Lian
27 feb 2004
TIGER Airways, backed by pedigree aviation partners Singapore Airlines and Ryanair's founder, has chosen as chief executive a man with no aviation experience and who's never flown budget.
'My wife thinks I'm crazy,' said Mr Patrick Gan, 47, who has spent the past 18 years in management, marketing and sales positions in pharmaceutical companies. He admits it had got 'monotonous'.
Introduced at a press conference on the sidelines of the Asian Aerospace show yesterday, he said: 'I was looking for a thrill. When the Tiger ad came up, it was a rare chance I could not just let go.'
When he was interviewed for the job, he was asked what he would bring to Tiger Airways since he had no aviation background. He said he replied: 'I have built businesses all my working life, turned companies around and talked to governments. My financing and marketing skills will stand me in good stead.'
His extensive CV lists premium names in pharmaceuticals, topped by Novartis, where he was area director for the Asia-Pacific, overseeing eight countries.
Before that, he headed Glaxo Wellcome in China, and Taiwan, and worked with Roche. And yes, he's Singaporean, and a National University of Singapore graduate.
His experience, 'analytical abilities, work ethic and integrity' got him the job, said Mr William Franke, managing partner and co-founder of Tiger's United States shareholder, Indigo Partners, and a former chief of America West Airlines.
'He comes with no airline industry baggage, so to speak, so we welcome his fresh perspective,' said Mr Franke, who was introduced yesterday as Tiger's chairman.
Mr Gan admits the steep learning curve does give him some anxiety but the 'pedigree shareholders' are a source of comfort.
He says he plans to apply for the air operator certificate within three weeks.
Since he was hired a month ago, he has been interviewing people for key posts. Tiger is to have 100 staff, including 35 pilots and 40 cabin crew.
It may acquire five or six aircraft in its first year, and a deal should be announced within a month.
He will lead negotiations with airports within a four-hour radius of Singapore.
Tiger Airways' most obvious competition will be Malaysia's AirAsia, and then 'some frills' Valuair.
Mr Gan said he aims to keep costs down and make Tiger 'the gold standard' for the region's budget airlines, with the lowest possible fares.
Like AirAsia, and unlike Valuair, Tiger will be no-frills and have multiple fare tiers.
Comparing all three business models, analysts interviewed yesterday questioned Valuair's 'neither here nor there' model.
'SIA can never go after AirAsia, but it can go after Valuair. It's easier for SIA to retaliate,' said one analyst.
DBS Vickers associate director Chris Sanda expects a Tiger-AirAsia price war. He said: 'There can only be one low-cost carrier. They'll bite and claw at each other.'
He thinks Tiger's choice of an outsider as CEO is a good move. 'The board can take care of strategy and the chief operating officer, the running of the planes. The CEO has to be a true manager and a good motivator.'
Budget airlines pay less than big carriers and thrive on creating a fun environment for employees, who must do many tasks to keep costs low.
He said: 'You need people with a strong personality to drive that. People with background in the industry don't do well.'
If Mr Gan's choice yesterday of proper dark suit and gold tie - tiger colours - seemed more business class than budget carrier, he didn't care.
He said: 'They are not my benchmark. My most important task is not to be an entertainer in front of you, but to ensure that Tiger flies.'
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Last edited by Wirraway; 28th Feb 2004 at 04:53.