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Singapore Airlines to set up new low-cost carrier

May 25, 2011

SINGAPORE:  Singapore Airlines (SIA) said Wednesday it will launch within one year a new low-cost airline plying medium- and long-haul routes to address growing consumer demand for budget travel.

SIA already runs a short-haul mid-price airline called SilkAir, and owns 32.9 percent of budget carrier Tiger Airways but said it decided to establish the new subsidiary after “an extensive review and analysis” of the market.
It did not give a name for the future airline.

“Operations are expected to begin within one year. The airline will be wholly owned by Singapore Airlines, but will be operated independently and managed separately from SIA,” the company said in a press statement.

SIA said the new carrier will “enable the airline to serve a largely untapped new market and cater to the growing demand among consumers for low-fare travel.”

SIA said on May 12 that full-year net profit rebounded strongly from the global recession as travel demand recovered.

The carrier said it earned S$1.09 billion ($873 million) in the financial year ended March 31, up five fold from S$$216 million a year ago while revenues rose 14 percent to S$14.5 billion.

But the airline cautioned that the near-term is expected to be difficult due to surging oil prices, concerns over the US economy, the impact from Japan’s quake-tsunami disasters and worries over Europe’s sovereign debt crisis.

-AFP


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