Is Taiwan’s budget airline market starting late? Guan Xu: Passenger numbers will multiply within five years

Reported by You T-Ru / Special Feature

How can we describe budget airlines (also known as low-cost carriers) to accurately understand their value? To put it precisely, a budget airline is like a Western meal — all the add-ons are side dishes and desserts, everything depends on what the passenger wants to enjoy after ordering the main course. Guan Xu, CEO of Tigerair Taiwan, said that in the future, Tigerair Taiwan will offer more “main course” options. “It all depends on where Taiwanese want to fly, and we’ll plan routes accordingly.”


▲ Guan Xu, CEO of Tigerair Taiwan. (Photo / Reporter Xu Wenbin)

Famous budget travel writer 943 has a sharp analogy for budget airlines: “The concept of a budget airline is like a Western meal. You can choose to just have the main course, or add something else — you don’t have to start with the appetizer to enjoy the meal.” Emphasizing the “user pays” principle, taking a budget airline to your destination is the “main course,” while checked baggage, meals, and in-flight entertainment are appetizers, side dishes, or desserts.

The concept of budget airlines may seem easy to grasp, but Guan Xu said that most people in Taiwan have not yet truly experienced flying with a budget airline. “In the entire Asian region, Taiwan’s budget airline industry can be said to have started the latest.” Compared to Malaysia, the birthplace of Asia’s first budget airline, whose travelers have had 13 years of exposure to low-cost carriers and routes covering various parts of Southeast Asia, with 30% of travelers choosing budget airlines, only 10% of Taiwanese use them.

“It is estimated that within the next three to five years, the number of people using budget airlines in Taiwan will double.” Guan Xu said that Southeast Asia is relatively more mature in budget airline development compared to Northeast Asia. While Taiwan’s budget airline industry did indeed start later than other countries, there is already some understanding of how budget airlines operate. Guan Xu cited his experience operating budget airlines in places like Singapore and admitted that it is quite difficult to overturn users’ habits with a brand-new concept and product. “It’s not easy to get a new concept into people’s minds, but luckily, Taiwan already has flights from other countries’ budget airlines, so it’s no longer a completely new idea.”


▲ Guan Xu predicts that within the next three to five years, the number of people using budget airlines in Taiwan will double. (Photo / Reporter Xu Wenbin)

Many traditional airlines have launched low-cost backpacker products and services in response to budget airlines. Guan Xu said that Tigerair Taiwan currently has no plans for package deals or cooperation with travel agencies, but the website will provide links to information on food, clothing, education, entertainment, and accommodation at various destinations to help passengers gather data. “Our main job is transportation — getting passengers safely to their destinations.”

Regarding the comparison between Tigerair Taiwan and V Air, Guan Xu pointed out that although both are new companies, Tigerair Taiwan’s advantage lies in its established brand, which has built stable experience and products over the past 10 years to serve as a reference. Guan Xu also said that both Tigerair Taiwan and V Air are expected to grow rapidly and expand their routes in the future. For example, Tigerair Taiwan will focus on continued development in the Northeast Asia market, with plans to launch flights to Japan and South Korea in spring 2015. “We hope to expand the population of outbound travelers and make it easier for more people to travel abroad.”

In addition to expanding routes, Tigerair Taiwan will also actively increase its fleet, aiming to reach 11 aircraft by 2017 and cover more destinations. Guan Xu revealed that more diverse products will be introduced in the future, along with some exciting special events. As for the flight safety concerns that many Taiwanese travelers have about budget airlines, Guan Xu said that Tigerair Taiwan maintains the same safety standards as traditional airlines, so passengers can feel assured trying it out.