Tiger Air Sells Philippine Unit to Cebu for $7 MillionKyunghee Park
Tiger Airways Holdings Ltd., partly owned by Singapore Airlines Ltd., sold a stake in a Philippine budget carrier to Cebu Air Inc. for $7 million, ahead of an alliance between the two smaller companies.
Cebu Air, majority owned by JG Summit Holdings Inc., will buy the 40 percent Tiger Air owns in Southeast Asian Airlines Inc., Tiger Air said in a statement to the Singapore stock exchange today. The company estimates a net loss of S$13.5 million ($11 million) from the sale.
The Philippines operations have been unprofitable for Tiger, and the sale comes after the company sold its Australian unit in April. From Vietnam to Indonesia, more than a dozen budget airlines have started across Southeast Asia in the past decade as economic growth in the region, home to about 600 million people, boosts demand for air travel.
Tiger Air will nominate Cebu Air to buy the remaining 60 percent stake in Southeast Asian from other shareholders, the airline said in the statement. The carrier last year sold a 60 percent stake in its Australian unit, which never made a profit since starting services, to Virgin Australia Holdings Ltd.
Last month, Tiger Air agreed to set up a venture with China Airlines Ltd. to tap into growing travel demand in Taiwan.
Singapore Air owns 40 percent of Tiger Air, according to data compiled by Bloomberg.