Tigerair could pull out of Indonesia

Reading Time: 1 minute

tigerair mandalaSingapore’s Tiger Airways Holdings Ltd. may be forced out of Indonesia, Southeast Asia’s biggest domestic airline market, as its unprofitable joint venture is squeezed out of routes dominated by big-spending local carriers. Tiger might sell or close Tigerair Mandala in the absence of any signs of the airline turning around this year, such as a significant reduction of losses, people familiar with the matter told Reuters.

Tiger has been streamlining its business to prevent a third straight year of loss, with its latest move being the January sale of Tigerair Philippines in a market where a sharp increase in available seats pushed down ticket prices. In Indonesia, Tigerair Mandala has a tiny share of a market overwhelmingly dominated by Lion Air group and flag-carrier Garuda Indonesia, who are adding routes and ordering more aircraft.

In contrast, Tigerair Mandala is suspending 9 routes – or 40 per cent of its capacity – between February and April 2014 to focus on more profitable routes, so Tiger avoids a repeat of the nearly $31.6 million loss incurred through the affiliate in April-December 2013.

Tiger owns 35.8 per cent of Tigerair Mandala, having raised its stake from a third in September 2013. But Tiger and Indonesian private equity firm Saratoga, which owns 51 per cent, are unwilling to make further investment, said the sources. Tiger Airways Holding is about 40 per cent owned by Singapore Airlines.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

Reading Time: 1 minute

Singapore’s Tiger Airways Holdings Ltd. may be forced out of Indonesia, Southeast Asia’s biggest domestic airline market, as its unprofitable joint venture is squeezed out of routes dominated by big-spending local carriers. Tiger might sell or close Tigerair Mandala in the absence of any signs of the airline turning around this year, such as a significant reduction of losses, people familiar with the matter told Reuters.

Reading Time: 1 minute

tigerair mandalaSingapore’s Tiger Airways Holdings Ltd. may be forced out of Indonesia, Southeast Asia’s biggest domestic airline market, as its unprofitable joint venture is squeezed out of routes dominated by big-spending local carriers. Tiger might sell or close Tigerair Mandala in the absence of any signs of the airline turning around this year, such as a significant reduction of losses, people familiar with the matter told Reuters.

Tiger has been streamlining its business to prevent a third straight year of loss, with its latest move being the January sale of Tigerair Philippines in a market where a sharp increase in available seats pushed down ticket prices. In Indonesia, Tigerair Mandala has a tiny share of a market overwhelmingly dominated by Lion Air group and flag-carrier Garuda Indonesia, who are adding routes and ordering more aircraft.

In contrast, Tigerair Mandala is suspending 9 routes – or 40 per cent of its capacity – between February and April 2014 to focus on more profitable routes, so Tiger avoids a repeat of the nearly $31.6 million loss incurred through the affiliate in April-December 2013.

Tiger owns 35.8 per cent of Tigerair Mandala, having raised its stake from a third in September 2013. But Tiger and Indonesian private equity firm Saratoga, which owns 51 per cent, are unwilling to make further investment, said the sources. Tiger Airways Holding is about 40 per cent owned by Singapore Airlines.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid