Tigerair could pull out of Indonesia

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.



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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. 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...

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.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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