Valuair chief lashes out at big airlines' price cuts
SIA, Cathay should fight each other, not budget carriers
By Karamjit Kaur THE move by Cathay Pacific and Singapore Airlines to slash fares to Hong Kong smacks of bullying tactics, said Valuair chief Lim Chin Beng, adding that the big boys should compete with each other instead.
At a pre-launch ceremony to mark Valuair's maiden flight to Bangkok yesterday, he said 'they should be watching each other and fighting with each other', rather than putting their efforts into 'losing money trying to fight with a budget carrier'.
He said this when asked to comment on Cathay's decision on Tuesday to offer $300 round-trip tickets to Hong Kong, the same promotional fare Valuair is offering for its own flights to Hong Kong, which begin tomorrow.
SIA is offering round-trip tickets at $368, if two people travel together. Its regular fare is $500.
Mr Lim, who was once deputy chairman of SIA, said: 'I'm very surprised they are doing this... It is a knee-jerk reaction and a show of force and strength.'
Still, he does not think the two flag carriers' low fares will last long 'unless they want to lose money'.
Will Valuair fight back?
He said: 'We do not believe in unhealthy cut-throat competition based solely on fares. We believe in product differentiation.'
At the end of the day, it is the product that will determine whether or not an airline survives, he said.
'We believe we have a good product. We offer some services, like simple meals and assigned seats, at a low fare. It may not be the lowest fare but it is low,' he said.
It is a concept that suits Mr Irving Low, 33, a partner at accounting giant KPMG, who was on board VF302 when it left Changi Airport at 1.50pm.
'I lived in Europe for several years and I have flown on budget carriers like Ryanair which offer no frills. It's nice to have a basic level of service and I don't mind paying a little extra for that,' he said.
Among the 162 passengers were nine journalists from Singapore. The flight took just over two hours and passengers were served a light meal of fried noodles, a small banana muffin and coffee or tea.
Also on the flight was professional triathlete Jonathan Pereira, 28, who said: 'For me, food is not a priority, especially on short flights like this one. The critical thing is good fares and convenient flight times.'
Still, if the fare was the same, he would choose a full-service airline for facilities like an in-flight entertainment system, he said.
For now, at least, it looks like a travellers' market.
Mr Trevor Williams, a venture capitalist, said: 'Each airline has its place and you choose based on your needs. If I am going on a business trip, I would probably fly a full-service airline but if it is short haul, Valuair is as good as anything else.'
Competition can only intensify as more budget carriers enter the market.
Valuair has adopted a hip and fun image and cabin crew wear polo T-shirts, trousers or skirts and sneakers.
Passengers on yesterday's flight also had a chance to win $100 StarHub vouchers, by answering simple questions about Valuair.
