Tiger Airways buys 40% of SEAir

AFP FILE PHOTO

MANILA, Philippines—Singapore’s Tiger Airways now has one foot firmly in the Philippine market’s door following the completion of its purchase of a 40-percent stake in local carrier Southeast Asian Airlines (SEAir).

Tiger becomes the second regional giant with a substantial interest in an airline operating in the Philippines. Earlier this year, AirAsia Inc., of which 40 percent is owned by Malaysia’s AirAsia Berhad, started domestic and international flights in the country.

The investment will be held through Tiger’s wholly owned subsidiary, Roar Aviation II Pte. Ltd. The remaining 60 percent is owned by Filipino shareholders.

“This deal represents a significant step forward for SEAir and will allow the airline to continue its tremendous growth and job-creation drive for Filipinos, bringing increased prosperity, highly-skilled jobs, and tourism to the country,” said newly appointed SEAir CEO Patrick Tan.

Tan replaced local airline industry veteran Avelino Zapanta as the company’s president. Zapanta used to head flag carrier Philippine Airlines (PAL).

Tiger Group CEO Koay Peng Yen said in a separate statement that the company would be “scaling up the business through network expansion, building a strong customer base and establishing the brand presence of SEAir.”

“The Philippines has tremendous growth potential and we welcome the opportunity to be at the heart of it,” he added.

The investment in SEAir is Tiger’s second joint venture. Tiger acquired a 33-percent stake in Mandala Airlines in Indonesia in January 2012. The acquisitions are part of Tiger’s strategy for expansion in the region.

SEAir will be adopting the Tiger business model, which includes offering value fares for domestic and international destinations within a five-hour flying radius of Manila and Clark, its current hubs.

In July and August 2012, SEAir launched flights from Manila Domestic Airport, also known as Ninoy Aquino International Airport (Naia) Terminal 4, to seven domestic destinations—Cebu, Davao, Tacloban, Iloilo, Puerto Princesa, Kalibo (Boracay) and Bacolod.

SEAir also operates flights from Clark International Airport to Bangkok, Hong Kong, Kota Kinabalu, Singapore and Kalibo (Boracay).

The airline has two Airbus A319 and three Airbus A320 jets, which are all leased from Tiger. Prior to the buy-in to SEAir, Tiger had a co-marketing agreement with the local airline that allowed the former to sell Tiger flights.