Aviation in Taiwan Part 2: LCC changes at Tigerair Taiwan, V Air and TransAsia.

This is Part 2 of a report on Taiwan's changing aviation scene. Tigerair Taiwan has become the island's largest LCC by far, twice the size of V Air, despite their launching a few months apart. Having expanded in Japan, the low-hanging fruit, Tigerair Taiwan now turns to more competitive markets in Southeast Asia and later to mainland China. Tigerair Taiwan will need to rebrand following expected rebranding among Singapore Airlines group LCCs, Tigerair and Scoot.

The larger challenge is at TransAsia and V Air. Full service TransAsia is moving to a hybrid model, bringing it even closer to its LCC, V Air. The overlap was awkward and now will increase, creating even more redundancy. TransAsia Airways has suffered following two crashes, but even before that its regional full service strategy with widebodies was at risk. There is a challenge of scale as V Air is one-fifth the size of TransAsia, itself very small, while Tigerair Taiwan is over two fifths the size of the longer established TransAsia. In short, TransAsia and V Air need to combine on a single strategy.

There is a small window of opportunity for V Air to take advantage of the anticipated Tigerair Taiwan rebranding. A downturn in tourism from mainland China further clouds the outlook. Although not entirely unexpected given the sensitive relationship with China, the decrease is no less painful.