SINGAPORE, Dec 16 — Singapore Airlines Ltd.’s budget carrier Scoot and Tiger Airways Holdings Ltd. formed partnerships in Taiwan, Thailand and India as demand for budget travel grows across Asia.

Scoot will own 49 per cent of its venture with Thailand’s Nok Airlines PCL, the carrier said in a statement today. Tiger Air, 33 per cent owned by Singapore Air, separately said it will form Tigerair Taiwan with Taoyuan-based China Airlines Ltd.

The carriers are seeking to attract more cost-conscious travellers as they face rising competition from AirAsia Bhd. and other budget airlines expanding in the region. Overcapacity among Asian low-cost carriers is driving down ticket prices and airlines need strong revenue growth, according to Bloomberg Industries research.

“Competition in north Asia is intensifying,” K Ajith, an analyst at UOB-Kay Hian Pte. in Singapore, said by phone. The agreement “gives Tiger a foothold into north Asia so it could feed air traffic into Singapore. It’s a way of taking on competition.”

Tiger Air separately announced a three-year pact with Indian discount carrier SpiceJet Ltd. that would allow flight connectivity between the airlines. It also signed an alliance with Scoot to expand their cooperation.

China Airlines, Taiwan’s largest carrier, was unchanged at NT$10.65 (RM1.16) at the close in Taipei trading. Tiger rose 2 per cent to 51 Singapore cents. SpiceJet jumped as much as 12 per cent, poised for the biggest gain since April 25, in Mumbai trading.

Market share

Low-cost carriers are increasing market share in Asia faster than anywhere else in the world, with capacity in the region rising 29 per cent in the six months to June compared with 0.8 per cent in Europe and 1.5 per cent in north America, Amadeus IT Holding SA said in a blog post October 28.

Traffic on Asian discount airlines has tripled since 2008, according to data compiled by Bloomberg, with passengers travelling 114 billion kilometres in 2012, compared with 37 billion kilometres in 2008.

Tiger Air has fallen behind AirAsia and Qantas Airways Ltd. as the two carriers have expanded their operations over the past two years, according to Bloomberg Industries data. AirAsia flew passengers 38 billion kilometres during 2012 and Jetstar’s total was 35 billion kilometres, compared with 11 billion kilometres by Tiger. Scoot doesn’t release operating statistics.

Asia expansion

AirAsia is establishing an affiliate in India and expanding in the Philippines. Qantas and Japan Airlines Co. in October injected ¥11 billion into their Jetstar Japan joint venture, and the Australian carrier is aiming to set up a Hong Kong unit with China Eastern Airlines Corp. and gambling tycoon Stanley Ho.

Taiwan’s TransAsia Airways Corp. is also planning to start a low-cost carrier serving destinations in Japan, Thailand, and Singapore, the company said November 20.

“The new JV will allow us to extend our presence into the new, untapped markets of Taiwan, Japan, and Korea,” Koay Peng Yen, Tiger Air chief executive officer, said in a statement today. “There is vast potential for growth in these markets and also areas of synergy to be explored between the two airlines.”

Scoot’s Thai venture will require an initial investment of 2 billion baht. Tiger will have 10 per cent of its NT$2 billion venture in Taiwan.

Closely-held Oasis Hong Kong Airlines Ltd., a budget carrier that challenged Cathay Pacific Airways Ltd., entered liquidation in 2008 after collapsing with about HK$1 billion in debt. Indonesia’s Batavia Air PT said in January it was stopping operations after going bankrupt.

The relatively small amount of capital committed to the deals is a positive aspect of the announcements, Ajith said.

“This shows an alignment between Scoot, China Airlines, Nok and Tiger,” said Ajith. Tiger’s partnership with China Air “is going to be worth to Tiger than the cumulative partnerships over the last three to five years.” — Bloomberg