Wednesday, August 18, 2010

Thai Tiger to be predominantly Thai

But foreign pilots, jets may be used initially

'Thai Tiger Airways (TTA), the no-frills carrier created by Thai Airways International (THAI) and Singapore-based Tiger Airways, is entitled to use foreign-registered aircraft and overseas cockpit crew to start its flights in Thailand.

Officials of the Department of Civil Aviation (DCA) yesterday provided the clarification that defuses one of the issues raised by critics of the THAI-Tiger deal that was announced on Monday.

Critics charged that the use of Singapore-registered aircraft and cockpit staff to enable TTA to get off the ground initially would be tantamount to offering domestic air traffic rights on a silver platter to a foreign airline.

They said TTA was going through the same "mistake" that was made by Thai AirAsia about seven years ago when the low-cost carrier initially deployed Malaysian-registered Boeing B737-300s and foreign pilots, borrowed from its parent AirAsia based in Sepang, to fly Thai domestic services.

Critics said most countries around the world, including the US, zealously reserve their domestic air traffic rights for locally owned carriers.

According to DCA regulations, a startup airline in Thailand is allowed to use foreign-registered aircraft as well as foreign pilots to fly domestic routes for up to one year, after which it must have Thailand-registered aircraft and be manned by Thai pilots.

TTA can be regarded as a "Thai airline" if it has no less than 51% Thai ownership with the maximum of 49% foreign holding, thus entitled it to be legally excused.

Under the memorandum of understanding signed on Monday, the Thai flag carrier and the airline's provident fund hold 51% in TTA and 49% by Tiger Airways Holdings.

Tiger Airways in turn is owned 33.7% by Singapore Airlines and others including the family which founded the Irish low-cost airline Ryanair as well as Dahlia Investment, a wholly owned subsidiary of Temasek Holdings (Pte) Ltd, the Singaporean government's investment arm.

The permission to temporarily use foreign aircraft and cockpit staff is meant to facilitate a startup carrier in Thailand to be up and running quickly but on the grounds that it intends to utilise Thai elements in a given time, DCA officials pointed out.

It is almost certain that the aircraft to be deployed by TTA, the single-aisle Airbus A320 jets, will be Singapore-registered because they will be leased from Tiger Airways, currently operating 19 such aircraft. It is also likely the aircraft would be initially flown by foreign cockpit staff before Thais are phased in.

Chokchai Panyayong, THAI's executive vice-president for strategy and business development, said yesterday TTA intends to have Thai nationals flying the jets when they get off the ground in the first quarter of next year.

Recruitment of Thai cockpit staff and other personnel including the chief executive of TTA will be made in the next two months or so when the airline's business plan is finalised, he noted.

"It (TTA) will have a considerable Thai presence because the airline will be largely controlled and run by Thais," he told the Bangkok Post.

Three out of the five directors in the new airline will be nominated by THAI, with the firm's chairmanship being held by THAI.

Tiger Airways group president Tony Davis and Ryanasia principal Declan Ryan will also sit on the board of TAA as the nominees for Tiger.

DCA officials said TTA, set up to fight off Thai AirAsia's growing dominance and to tap fast-growing budget air travel demand, has not yet approached the department for registration, traffic rights and route allocations.

Any licensed airlines are free to operate trunk routes domestically, such as Bangkok to Chiang Mai, but are subject to allotments for international routes under air traffic right agreements between Thailand and foreign countries.

Tentatively, TTA planned to initially operate eight routes out of Suvarnabhumi Airport to Phuket, Chiang Mai, Kuala Lumpur, Penang, Macau, Chennai, Shenzhen and Phuket-Chiang Mai.

TTA plans to have five A320s in service next year with another five joining the fleet a year later.

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