Tiger Airways has completed a deal to acquire a 40% stake in Southeast Asian Airlines (SEAir).
The parties had agreed a purchase price of US$7 million, but this has been reduced significantly to US$2.5m, as a result of a due diligence review to determine SEAir’s liabilities. The stake in the Philippine low-cost carrier will be held through Tiger’s wholly-owned subsidiary, Roar Aviation II Pte Ltd.
Singapore-based Tiger said it is “committed to supporting the working capital needs of SEAir, including pre-existing liabilities, with shareholder loans of up to US$40 million”.
“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 airline’s brand presence,” said Tiger’s Group CEO, Koay Peng Yen. “The Philippines has tremendous growth potential and we welcome the opportunity to be at the heart of it.”
The investment in SEAir is Tiger’s second joint venture. Earlier this year the airline acquired a 33% stake in Indonesia’s Mandala Airlines, and has since seen the airline relaunch operations under Tiger’s LCC business model. Tiger said the acquisitions are in line with its “strategy to expand and develop its business in the region”. The airline already has units based in Singapore and Australia.
Like Mandala, SEAir will adopt Tiger’s low-cost business model, flying to domestic and international destinations within a five-hour radius from its twin home bases at Manila’s Ninoy Aquino International Airport (NAIA) and Clark International Airport. Like Tiger, SEAir will operate a fleet of single-class Airbus A320s.
Since the end of last month SEAir has added a series of new domestic flights from NAIA to Cebu, Davao, Tacloban, Iloilo, Puerto Princesa, Kalibo and Bacolod. The airline also operates flights from Clark to Bangkok, Hong Kong, Kota Kinabalu, Singapore and Boracay.