Tiger Airways to buy stake in SEAIR

Singapore-based Tiger Airways plans to acquire a 32.5 percent stake in Filipino carrier South East Asian Airlines (SEAIR) for US$6 million. The deal, which is expected to be sealed by May, paves the way for Tiger to gain access to the Philippines’ domestic air travel market. Low-cost carrier (LCCs) Cebu Pacific Air has the lion’s share of the market with 48.2 percent, while Philippine Airlines (PAL) has 37 percent, with the rest divided among SEAIR and LCCs such as Zest Airways and PAL Express.

4th Apr 2011


Tiger Airways to buy stake in SEAIR


Singapore-based Tiger Airways plans to acquire a 32.5 percent stake in Filipino carrier South East Asian Airlines (SEAIR) for US$6 million.
The deal, which is expected to be sealed by May, paves the way for Tiger to gain access to the Philippines’ domestic air travel market. Low-cost carrier (LCCs) Cebu Pacific Air has the lion’s share of the market with 48.2 percent, while Philippine Airlines (PAL) has 37 percent, with the rest divided among SEAIR and LCCs such as Zest Airways and PAL Express.
Based at Diosdado Macapagal International Airport in Clark, 80km outside Manila, SEAIR started jet operations in December last year with daily flights to Singapore and Macau, using Airbus A320 aircraft. On 14 March, the company launched daily flights to Hong Kong.
SEAIR, which has leased two Airbus A320 jetliners from Tiger, plans to expand its international network with point-to-point flights within a five-hour radius of its home base as it expands its fleet.
The Filipino and Singaporean airlines first had talks in 2006, submitting a proposal for co-operation to the Department of Transportation (DOT) in Manila. At the time, Cebu Pacific, PAL, Asian Spirit (which later became Zest Air) and Air Philippines protested against the tie-up.
The plan was finally approved by the DOT in June 2008 and was supposed to get off the ground in April 2009. However, it was abandoned due to poor market conditions and the global economic crisis.
Tiger Airways and SEAIR revived the plan in June 2010 and finally launched their co-operation on 2 December 2010. The partnership covered the lease of Tiger’s aircraft, selling and marketing seats on SEAIR-operated flights using those aircraft.
As well as its A320s, SEAIR, which started operations in 1995, operates a fleet of four Dornier 328-100 turboprops to island resorts in the Philippines.
Meanwhile, in Bangkok, Tiger Airways’ LCC joint venture with Thai Airways International, which was supposed to take off on 2 March, is now expected to be delayed until June, due to late approval from the Thai authorities for the venture’s equity structure.
Thai Airways will hold 49.9 percent of the new company, while Tiger Airways will own another 49 percent and the remaining 1.1 percent will be held by the venture’s employees.
The new carrier, named Thai Tiger Airways, will initially operate to Singapore, Kuala Lumpur, Hanoi, Penang, Macau and Hong Kong, from hubs in Bangkok and Phuket.
Tiger Airways was forced to abandon a proposed South Korean domestic LCC joint venture with Incheon Municipality in early 2010, after local rivals Jin Air, Eastar Jet and Air Busan lodged a protested with the government against a foreign carrier being given access to the country’s domestic market.
After waiting more than two years for a South Korean air operating certificate, Tiger Airways pulled out when it decided that the Ministry of Land, Transport and Maritime Affairs in Seoul was deliberately dragging its feet.

 

Asian Aviation at a glance