Budget JetStar's arrival triggers price war

SINGAPORE SLIDE: China Airlines plans some special offers when JetStar begins flying between the Lion City and Taipei, while EVA Airways is taking a wait-and-see approach

By Jessie Ho and Jackie Lin  /  STAFF REPORTERS

Thu, Dec 09, 2004 - Page 10

China Airlines (CAL, 華航) said yesterday that it will offer some special promotions on the Taipei-Singapore route, following Singa-pore Airlines' move to cut its ticket prices and the announcement that low-cost airline Jetstar Asia will begin service on the route next week.

But CAL dismissed speculation that the arrival of a budget airline will have an impact on it.

"I think the carrier [Jetstar Asia] is just using the [cheap ticket] strategy to attract attention instead of offering such rates on a long-term basis," Roger Han (韓梁中), spokesman for China Airlines, said yesterday.

CAL already offers competitive prices due to its efficient cost-control policies, especially since its personnel costs are one-third lower than foreign carriers', he said.

Singapore-based JetStar said it will offer a one-way ticket between Singapore and Taipei priced at NT$1,788, excluding tax and insurance, starting Dec. 16.

The offer is good for the first week it flies the route. Ticket prices will then be raised, depending on market demand.

On Tuesday, Singapore Airlines said it would provide a new round-trip economy-class ticket for the Taipei-Singapore route between Dec. 16 and March 31 with prices starting at NT$1,688.

The final fare, however, with additional charges, including airport taxes and war-risk insurance, will be NT$4,139 by next Tuesday as taxes are subject to exchange-rate fluctuations, said Sharon Wu (吳蓓南), Singapore Airlines' public relations manager.

There is, however, a "blackout period" from Jan. 21 to Feb. 24 on the offer. Other restrictions will apply, including no rescheduling, no refunds, no frequent flier mileage and passengers must stay in the destination city for at least two days.

"Despite the low price, the service quality will not be cut and meals will be offered," Wu said.

JetStar passengers must pay for food and drinks and the spacing between seats is narrower than on the big carriers.

Han said JetStar's discount tickets are not really convenient for most people, because the flights are in off-peak hours and the tickets cannot be cancelled or rescheduled.

EVA Airways Corp's (長榮) spokesman Nieh Kuo-wei (聶國維) also brushed off concerns that the new player will affect the airline, especially when it comes to flight schedules.

EVA's flights to Singapore leave at 7:40am and then leave from there at 1:10pm for the return trip. JetStar's flights will leave Taipei at 6:20pm and leave Singapore for Taipei at 1pm.

Nieh said EVA is taking a wait-and-see attitude for now, but may adjust its marketing strategy if necessary.

Han also pointed out that budget airlines cannot save money here by using airports with cheaper ground service and landing fees as they usually do since Taiwan has a limited number of airports.