Tiger Air completes purchase of 40% stake in SEAir

MANILA, Philippines – Singapore Airlines’ budget arm Tiger Airways Holdings Ltd announced the completion of its acquisition of the maximum allowed foreign stake in local carrier South East Asian Airlines Inc. (SEAir), the 5th largest player in an industry of 6.

The deal, announced in April, marks the hike of the stake in Seair to 40% from the previous 32.5%. Previously, Tiger told the Singapore Stock Exchange that the recent purchase amounts to US$7 million.

(Read analysis: With Tiger hiking stake, SEAir not to be counted out yet)

In a statement on Tuesday, August 14, Tiger said its investment in SEAir will be coursed through Tiger’s wholly-owned subsidiary Roar Aviation II Pte. Ltd. The remaining 60% 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 Chief Executive Officer Patrick Tan.

“Together with our Philippine business partners, our immediate focus will be on 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,” said Tiger Group Chief Executive Officer Koay Peng Yen.

New leaders

Meantime, the new investments involve changes at the top.

Avelino Zapanta, who was president of SEAir for the past 6 years after he ended his stint as president of Philippine Airlines (PAL), has stepped down to make room for Tan, the new CEO.

The investment in SEAir is Tiger’s second joint venture. Tiger acquired a 33% 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 5-hour flying radius of Manila and Clark, its current hubs.

SEAir currently market Tiger-branded flights on international routes.

Fleet

In July and August 2012, SEAIR launched flights from the Domestic Terminal, also known as Ninoy Aquino International Airport (NAIA) Terminal 4, to 7 domestic destinations – Cebu, Davao, Tacloban, Iloilo, Puerto Princesa, Kalibo (Boracay), and Bacolod.

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

The flights bound for the tourist haven of Boracay island accounting for bulk of the traffic.

Plans include beefing up SEAir’s current fleet of two A319s and three A320s with new airlines. – Rappler.com