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Tiger Air may increase A320 order by 20 planes

Tiger Airways Pte, the budget carrier partially owned by Singapore Airlines Ltd, may order 20 more Airbus SAS A320 planes as it sets up a base in South Korea and expands in Australia, Malaysia and India.

"It's really a case now of adding density to the operation and filling some of the gaps," CEO Tony Davis said in an interview in Singapore yesterday.

The carrier, which has already ordered 46 A320s, has options for 20 more.

Tiger Air, AirAsia Bhd and other Asian budget carriers have increased their orders of Airbus and Boeing Co planes as economic growth and liberalization allow them to fly more routes. Tiger Air may start Singapore-Kuala Lumpur flights as early as February, while its South Korean affiliate is scheduled to enter service around the end of next year.

"There's just so much untapped traffic in the region,'' said Peter Harbison, managing director of the Center for Asia Pacific Aviation.

There are probably 300 million potential passengers waiting to fly between South Korea, China and Japan alone, Harbison said.

Tiger Air agreed to options for the 20 A320s alongside an order for 30 planes that was signed in October. Davis declined to say when the options would be converted. The 20 single-aisle aircraft are worth US$1.46 billion at list prices. Airlines usually receive discounts for large orders.

The Singaporean carrier currently flies 12 A320s. AirAsia, which has operations in Malaysia, Indonesia and Thailand, has ordered a total of 175 A320s. PT Lion Mentari, Indonesia's biggest budget carrier, has signed up for 122 Boeing 737-900ERs.

Tiger Air added the Indian cities of Chennai and Kochi to its network in October and began domestic flights in Australia last month.

Its South Korean affiliate, a venture with the Incheon city government, will compete with Korean Air Lines Co's planned low-cost unit and Jeju Air Co, the nation's largest budget carrier, which said last month that it planned to add 15 737s by 2013.

Tiger Air also has the right to challenge Singapore Air and Malaysian Airline System Bhd on flights between the countries' capitals next year after the two governments agreed to end the larger airlines' three-decade-long near-monopoly on the route.

The agreement is in line with the ASEAN pledge to free up air services between their capital cities by December next year and to fully liberalize aviation services in the region by 2015.

A fully liberalized Asian air-travel market could generate as many as 1,600 low-cost routes by 2015, Airbus estimated.
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