Thai Airways plans to strike deal with Tiger

Carriers still want to gain most out of low-cost airlines despite the overcrowded market in Asia.

Flag carrier Thai Airways International Pcl said on Sunday it plans to form a new low-fare airline with Singapore's Tiger Airways Holdings Ltd, adding to Asia's crowded budget airline market.

The two airlines will hold a joint news conference in Bangkok on Monday to announce the signing of a memorandum of understanding for the new airline, said a Thai Airways official, who declined to provide further details.

The deal coincides with a cost-cutting drive by Thai Airways, which said on July 21 it expected to cut costs by as much as 20 billion baht ($620 million) from 2010 to 2012.

The "Thai Tiger" joint venture will be 51 percent owned by Thai Airways and 49 percent owned by Tiger, said a source with knowledge of the deal who declined to be identified.

The new carrier will operate routes that will not overlap those run by Thai Airway's current low-cost affiliate NokAir, the source added.

View the full story in Reuters.