Analysis | Why Starlux decided against operating local flights?

Here are several important reasons for understanding their decision

TAIPEI (The China Post) — Contrary to all expectations, Starlux does not plan to operate domestic flights in Taiwan after all.

In a statement sent to Chinese-language media China Times (中時電子報), Starlux Airlines spokesman Nieh Kuo-wei (聶國維) said that Starlux has decided against operating domestically because its aircraft and equipment differ from other airlines.

The company will strive to expand international routes instead, he added.

The photo taken on Friday shows the interior of a StarLux Airline A320neo airplane. (CNA)
The interior of a StarLux Airline A320neo airplane is featured in this undated photo. (CNA)

The luxury startup airline’s decision comes at a critical time where domestic carriers Mandarin Airlines and Uni Air have wet-leased larger international aircraft from their parent companies in response to the surging demand for air travel within Taiwan.

The coronavirus outbreak has caused border closures and travel restrictions around the world, leading many Taiwanese residents to flock to outlying islands, such as Penghu (澎湖), during the summer break.

In light of the soaring demand, many speculated that Starlux would fly its planes on domestic routes too, given that in the status quo, many of the airline’s planes are not being utilized and have been parked at the airport.

Starlux will launch flights to Cebu, the second-largest city in the Philippines, on July I, delaying the original launch scheduled for April 6. (NOWnews)
Starlux will launch flights to Cebu, the second-largest city in the Philippines, later this year, delaying the original launch scheduled for April 6. (NOWnews)

Once again, Starlux has not acted in line with the expectations of the general public though. Here are several important reasons for understanding their decision.

To begin with, there is a world of difference in terms of aircraft interior and cabin configuration between local airlines even though the brand new A321neos aircraft delivered to Starlux Airlines are similar in size to EVA Air’s A321s and Tigerair Taiwan’s A320s.

The former is equipped with fully flat business class seats that turn into beds, free WiFi access across all cabins, and even large touchscreens for inflight entertainment equipped at every single seat. In contrast, the latter two are designed for shorter flights and thus lack such features.

So while Starlux Airlines’ ultra-luxurious A321neos would be able to attract high-end passengers who pay a premium to enjoy upscale services, the planes are incredibly expensive to fly due to the increased weight and operating costs.

Flight attendants stand for photos at Starlux Airline's debut press conference on Friday. (CNA)
Flight attendants stand for photos at Starlux Airline’s debut press conference last year. (CNA)

On short 30-minute-long domestic flights, in particular, it would be difficult for the luxury airline to turn a profit given that Taiwan authorities have set pricing caps.

More importantly, Starlux is an international airline based in Taipei, meaning that the company does not currently have any employees or airport equipment based on Penghu or any other domestic destinations.

In contrast, both Mandarin Airlines and Uni Air have operated domestically for decades, making it easier for them to handle their parent companies’ aircraft at well-established airport bases.

If Starlux Airlines were to operate at any domestic airport, the company would have to recruit and/or train staff members working for that specific location, in addition to purchasing any ground handling equipment in order to effectively serve customers.

StarLux could soon restart commercial service to three Asian destinations using single-aisle Airbus A321neo aircraft. (Courtesy of STARLUX)

Without a doubt, it doesn’t make sense for Starlux to make such costly efforts if the airline only planned to serve the domestic market on a short term basis.

Last but not least, the airline would have to apply for an additional license for domestic flights because Starlux Airlines does not have a subsidiary.

Unlike their competitors who are leasing larger international aircraft from a different airline on paper, Starlux Airlines may face challenges getting approval from the Taiwan CAA (Civil Aeronautics Administration 民航局) to operate seasonal flights within Taiwan on such short notice.

It might seem surprising for some at first that Starlux Airlines opted not to serve what may seem like a lucrative market in this day and age.

But since the airline world is very complex in nature, it is important to carefully consider the various factors that affect a company’s decision. Stay tuned to the China Post for more news and in-depth analysis of the aviation industry.

StarLux's uniform collection for cabin and ground crews has been designed by Taiwan fashion designer Sean Yin and combines fashion elements from the 1940s and 1950s with space-age accents. (NOWnews)
StarLux’s uniform collection for cabin and ground crews has been designed by Taiwan fashion designer Sean Yin and combines fashion elements from the 1940s and 1950s with space-age accents. (NOWnews)