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SINGAPORE : Low-cost carrier Tiger Airways has started trials in cargo handling services, as part of plans to build a new revenue stream.
Tiger said feedback to the trials have been positive so far, but stressed that the project is still in its early days.
Experts said one issue for Tiger is how its cargo operations will affect its turnaround times.
Tiger has carried about 12 million passengers since it started flying in 2004.
But now it wants to carry cargo as well on board its fleet of Airbus A320 planes, rather than leaving cargo space empty, because many passengers tend not to check in their luggage.
Tiger has been testing out its cargo handling plan for nearly a month now and has seen several benefits.
Rosalynn Tay, managing director, Tiger Airways Singapore, said: "We have just started our cargo trials and the reason for that is it is ... an ancillary revenue stream, plus it helps us to optimise our profitability and aircraft utilisation.
"It has actually been very positive; definitely there is a market for us to get into, and it is very encouraging, and I think this will augur very well for our network rollout, eventually."
Cargo trials are currently underway between Singapore and five Southeast Asian cities - Bangkok, Jakarta, Kuala Lumpur, Kuching and Penang.
Experts said that while it is typical for legacy carriers to carry cargo, it may be trickier for low-cost carriers to adopt the same business model.
They do not expect a trend of other low-cost carriers offering cargo, as this will largely depend on how successfully they can integrate the service into their operations.
Siva Govindasamy, Asia managing director, Flightglobal, said: "The key thing for low-cost carriers and what they have to consistently watch out for is turnaround times. Their business model hinges on getting passengers into the aircraft as fast as they can, and off into the air as fast as they can, and into the next destination as fast as they can, and getting that aircraft out again with an aircraft load of passengers.
"If cargo is going to affect these turnaround times, then that could be an issue. So it is a matter of how they are going to mitigate it. Tiger says it is going to be able to handle that. It is confident, so is AirAsia, but we will see how that goes. That is really the one big thing they have to watch out for."
Tiger said it will ensure trials do not compromise safety, security and punctuality.
Ms Tay said: "What we have done is we have been very careful, we have put measures in place to ensure that there is no impact on operations, because transporting our passengers from point to point safely on time is our primary objective.
"When I say measures, I mean operationally we ensure that we actually go through all the different steps to ensure that our partners at the stations, as well as internally, are prepared for the trial ... the usual operational measures in terms of ensuring consistency, cargo loading..."
The airline's foray into cargo follows similar plans by its rival AirAsia last month.
Tiger is also planning other ways to boost its cost efficiency. It is introducing leather seats in future deliveries of aircraft.
Ms Tay said: "We will be bringing in leather seats for our new deliveries and that is something we know that customers want and they have asked for, and it provides more comfort, but more importantly, it helps us because it is low cost of maintenance and it helps us maintain our operational costs.
"The truth is leather seats are more durable; that is why they actually provide lower maintenance costs for us, and that actually translates to lower operational costs. There is less wear and tear."
Leather seats are already available on Jetstar Asia and AirAsia. - CNA/ms
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