Tiger Airways to launch new Australian airline

SYDNEY, Feb 9 (Reuters) Singapore's Tiger Airways said on Friday it planned to launch a new domestic Australian airline to compete with local carriers Qantas Airways Ltd. and Virgin Blue Holdings Ltd. .

Tiger Airways, a low-fare airline partly owned by Singapore Airlines , said it was seeking regulatory approval to establish a third domestic airline and met with Australian government ministers this week.

The carrier models itself on Irish no-frills carrier Ryanair with a strategy of undercutting rival airlines with cheaper fares.

''Fares are too high in Australia. We see the opportunity to deliver consistently low fares on all our routes,'' Chief Executive Tony Davis said in a statement.

Tiger wants to compete directly with Qantas' low-cost subsidiary Jetstar which was launched in 2004 to challenge Richard Branson's Australian venture Virgin Blue.

Qantas is the subject of an .7 billion buyout bid from a consortium led by Macquarie Bank Ltd. and Texas Pacific Group

The Australian aviation market has traditionally been only able to accommodate two or three carriers. Qantas' biggest rival Ansett collapsed in 2001, paving the way for Virgin to boost its share of the domestic market.

Tiger Airways already flies from Darwin to Singapore and will introduce a service between Singapore and Perth next month.

Tiger Airways started flights in September 2004 and has nine Airbus A320 aircraft flying from Singapore to 16 cities in Asia. It carried more than 2 million passengers last year.

State-controlled Singapore Air holds 49 percent of Tiger, while Singapore state investment firm Temasek [TEM.UL] has 11 percent.

Its remaining two shareholders are Indigo Partners, an investment firm founded by former America West chief Bill Franke, with 24 percent, and Ryanair founder Tony Ryan with 16 percent.

REUTERS DKS BST0647