Tiger (Airways) burning not so bright

Beleaguered budget carrier Tiger Airways is hoping to raise S$156.6 million through a Rights issue, a move seen largely as providing an avenue for Singapore Airlines (SIA) – which owns 32.9 per cent of the carrier – to come to its rescue. SIA and fellow Singapore partner Temasek Holdings – which has an 11 per cent stake in Tiger – will subscribe fully to the issue. Ryanair owners, which in 2010 sold half of their stake, are non-committal.

That might well be a blessing for Tiger with SIA taking a greater, if not almost exclusive, interest in the management of the carrier, as has already been evident when Tiger in Australia was suspended in June by the authorities for safety infringement. Indeed, when Tiger was launched in 2005, it was with much promise of success since pedigree parents and major partners Singapore Airlines and Ryanair were both masters in their respective fields. Today as the carrier undergoes a makeover, one dominant parent may be better than two (or more) with divided and worse, lukewarm and possibly even conflicting attention.

Yet things may change as SIA launches its wholly-owned budget subsidiary by next year. While Tiger started flying initially to destinations to fill gaps that SIA and SilkAir created when they left those ports, it was only to be expected it would soon grow its own network and it did. How would Tiger and SIA’s new budget subsidiary compete with, if not complement, each other – more so perhaps in Asia?

Even in Australia, the situation may not be quite as immutable now that SIA has entered into an alliance with Tiger’s competitor, Virgin Australia whereby as a first step SIA passengers can enjoy seamless connections to a range of Australian destinations served by Virgin. It looks like the tiger may be losing its stripes.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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