Exclusive: Singapore announces new low cost startup to operate domestic flights

    Singapore has traditionally been a leader in international liberalisation, Singapore Airlines has been a world leader in the full service market and the government has maintained a very liberal access regime; but domestically things have been held rather tightly. Until now, getting around Singapore has been almost exclusively restricted to surface transport, by road or rail.

    That is all about to change, as a new domestic LCC, to be named Laksair, will commence operations with a fleet of 12 737MAXs, effective Jun-2018. The aircraft will be leased from Airbus Leasing Corp, but in the medium term Laksair plans to purchase the equipment.

    Singapore has a very high per capita GDP, of over USD51,000, so the market for air travel is potentially immense. In many ways therefore it is surprising that no serious entrant has previously presented.

    According to unofficial plans leaked to BlueSwanDaily, the new LCC will operate high frequency service initially between the main airport, Changi International, to Seletar, Tengah and Pulau Sudong. Further services to Paya Bawang and Kallang Airport are planned for later in the year.

    CEO of the new airline, Ms Antonia Fernandes, says the LCC will be backed by very substantial international wealth funds and believes that, given the current lack of air competition in the Singapore market, “the upside for growth is phenomenal”.

    One additional route that Ms Fernandes believes has great potential is a link from the international airport at Changi to the resort island of Sentosa. “This is a highly desirable and popular resort and improving direct air access to the island for international visitors is long overdue,”, said Ms Fernandes. As there is currently no airport on the island, Laksair’s backers are exploring the construction of a new 1800m runway just off the beach, along the model of Osaka’s Kansai Airport. This would have the added attraction of being continental Asia’s southernmost airport.

    For the longer term, Laksair will also explore the potential for a direct link to the downtown area during the period of the Singapore Grand Prix. Explains Ms Fernandes, “during the race week, surface transportation becomes very congested, as large volumes of racegoers descend on the city over a short period of time. We could even look at a temporary lease of one or more of Malaysia Airlines’ A380s for this week in future.”

    When approached, a Singapore Tourism Board representative preferred not to comment at this stage. He said, “while we always support innovative new tourism related ventures, we would rather wait until plans are further advanced before we commit resources to this project.”