SINGAPORE Airlines (SIA) confirmed yesterday its intention to establish a new medium- and long-haul low-cost carrier (LCC) in Singapore within a year.

While the corporate branding, fleet and network of this new wholly-owned subsidiary remains unknown, what is clear is that the new airline will have different branding from SIA, operate wide-body aircraft and be managed independently.

Recent news of intention by AirAsia and Qantas Airways to establish subsidiaries in Singapore may have hastened the launch of this new airline, but plans – even if only as a contingency – must have been in the works for some time.

The new airline could also be useful for SIA to offload underperforming destinations such as Athens, as well as allow it to embrace new leisure destinations that have hitherto not fit into SIA’s business model.

SIA is in the process of retiring its few remaining B747-400s and a small number of B777-200s. Some of these aircraft could possibly form the backbone of the new subsidiary’s fleet.

MALAYSIA climbed three places to number 28 in the latest International Congress and Convention Association (ICCA) world rankings, while retaining its seventh placing among the top 10 meeting destinations in Asia-Pacific.

The country’s ICCA ranking was boosted by an additional seven international events held in Kuala Lumpur last year, the largest of which was the 18th World Congress of Accountants, with a record attendance of over 6,000 delegates.

Other major meetings included the Asian Pacific Digestive Week (2,661 delegates), 6th World Islamic Economic Forum (2,000 delegates) and the 2nd Global Model United Nations Conference (1,000 delegates).

The number of meetings hosted in the country grew 24 per cent year-on-year, from 96 meetings in 2009 to 119 meetings in 2010. Malaysia welcomed 1.3 million international business event visitors last year, who contributed an estimated US$6 billion in revenue.

Zulkefli Hj Sharif, Malaysia Convention & Exhibition Bureau (MyCEB) CEO, said: “The growth of meetings hosted in Malaysia and improvements in our ICCA rankings reflect the strength of the collaboration and commitment between the Malaysian Tourism Ministry, MyCEB and our industry partners to bid for, secure and deliver successful international meetings for the country amidst an increasingly competitive market.”

“Within the next five years, the business tourism industry will be further supported by new facilities, offering international and regional associations and meeting planners more venue options to host their meetings and events in Malaysia, and be able to rotate to other parts of the country such as Pahang, Penang and Sarawak, besides Kuala Lumpur,” he added.

Key developments in the pipeline include the expansion of the Kuala Lumpur Convention Centre by an additional 10,000m2 by end-2013, the launch of Penang International Convention and Exhibition Center by 2014, and the proposed development of MATRADE Centre (93,000m2) by 2014.

By Ellen Chen

SOUTHEAST Asian Air’s (SEAir) Manila-Cebu and Manila-Davao routes, due to launch in July, have been suspended by Philippine civil aviation authorities, who are investigating whether the airline’s partnership with Singapore’s Tiger Airways violates local laws.

The temporary cease-and-desist order was issued after joint and separate complaints were filed by the country’s four other carriers – Philippine Airlines, Cebu Pacific, Zest Air, and Air Philippines Express.

The complaints allege cabotage rights – the license to carry passengers and shipment cargo between two points in one country, and which are usually extended only to domestic airlines – are being violated by SEAir’s aircraft lease and marketing agreement with the Singapore carrier. SEAir’s two new routes would be operated using Tiger Airways aircraft.

Wyrlou Samodio, head of the Civil Aviation Board’s legal division, told TTG Asia e-Daily on Monday: “SEAir’s lease agreement (with Tiger Airways) will be affected if the findings show it was used to circumvent cabotage rules.”

SEAir’s relationship with Tiger Airways dates back to 2006, when SEAir signed the aircraft lease agreement, as well as a marketing arrangement to use Tiger Airways’ reservations system. Tiger Airways is currently in the process of acquiring a 32.5 per cent stake in SEAir for about US$6 million.

SEAir operates three international routes from Clark International Airport using Tiger Airways aircraft: Singapore, launched last December; Hong Kong, launched last March; and Macau, due to begin on May 27.

Tiger Airways has been busy making other budget airline investments in South-east Asia. Last week, the carrier said it would acquire 33 per cent of Indonesia-based PT Mandala Airlines, which is in rescue talks with an Indonesian private equity fund planning to secure 51 per cent majority ownership.

THE INDONESIAN government is set to tackle Jakarta international airport’s capacity problems by revamping it at a cost of 11.75 trillion rupiah (US$1.4 billion) over the next three years.

The Soekarno-Hatta International Airport redevelopment project will include renovating Terminal 1 and 2, completing the development of Terminal 3, and building a new cargo terminal.

The airport has the capacity to handle 22 million passengers yearly, but is currently catering to 44.2 million passengers. The situation has been a concern for the travel trade and air passengers, especially during peak season.

Indonesia’s vice president, Boediono, said: “The development of Soekarno-Hatta airport should be a national priority, as the longer we delay the project, the more difficult it will be to overcome (the problem of capacity shortage).”

The vice president’s spokesman Yopie Hidayat said that the target was to increase the terminal capacity to 62 million passengers per year, and the apron capacity from 125 aircraft to 174 aircraft by 2014.

Commenting on the plan, WITA Tours director of sales and marketing, Rudiana, said that improvement should not only be in terms of hardware, but also services.

“The convenience of passengers should be the priority,” Rudiana said. “There should be clear signs, lanes, and flows, especially for arriving passengers.”

SINGAPORE-based luxury tour operator Lightfoot Travel opened its first office in Hong Kong last week.

Lightfoot Travel director, Nico Heath, said the move was precipitated by good business and demand from Hong Kong.

“Ninety per cent of our overall traffic is from Asia, and the rest is from Europe,” he said. “In our Singapore office, FIT makes up 80 per cent, while corporate travel accounts for 20 per cent.

The Hong Kong operations will consist of two staff (one for the Macau market), headed by travel specialist Lucy Jackson, who is in-charge of developing tailor-made travel products.

Jackson said: “Our primary market is expatriates, but we still want to get into the local market, as well as tap the booming China market.”

“As corporate business has bounced back, some banks want to treat their clients or reward the best sales team, so I will also drive business by expanding the corporate side.”

ACCOR is continuing to expand its presence in Thailand, adding 1,400 rooms to its Thai portfolio over the last six months, despite concerns over the country’s oversupply and slow-moving demand.

The chain now manages 50 hotels and 11,759 rooms in Thailand, and is scheduled to open the 166-room Hotel Muse Bangkok Langsuan and 213-room Mercure Krabi Deevana over the next six months. It opened the 162-room All Seasons Bangkok Victory Monument yesterday.

“We will open more (hotels) within this year,” said Accor Thailand operations director, Paul Stevens. “We are negotiating management agreements with more investors.”

Accor’s hotels in the country finished the first quarter of the year with an average occupancy rate of more than 70 per cent, similar to the same period last year. Its average room rate improved by one to two per cent, while RevPAR “did not grow,” said Stevens, blaming this on a combination of Accor’s growing inventory, Thailand’s oversupply and sluggish visitor arrivals.

As the country is entering low season, Accor is set to deploy a tactical marketing strategy, “mostly through online channels and partnerships with commercial brands”, to fill up rooms between June and October.

By Sirima Eamtako

SRILANKAN Airlines said in a statement yesterday that all its flights to Europe were departing as scheduled, but that a contingency plan was in place should volcanic ash from Iceland’s Grimsvötn volcano sweep further into the region.

The carrier said its passengers to European destinations had been asked to check with the airline for the latest updates six hours before departure.

The volcano in Iceland, which began erupting last Saturday, caused European air traffic controllers to ground 252 flights yesterday, for fear that particles in the ash would stall jet engines and sandblast planes’ windows.

The British High Commission in Colombo released a statement saying that many flights to and from Scotland were cancelled yesterday.

Flights to and from Northern Ireland, Germany and Sweden have also been affected by expanding ash plume.

The High Commission advised British travellers in Sri Lanka and the Maldives to remain in close contact with their airlines and travel agents for latest developments and schedules, in case more flights were disrupted.