Tigerair sees red, continues to retreat: Will SIA let it go?



JUST after a month after it sold its stake in Tigerair Philippines to Cebu Pacific Air, Tigerair is rumoured to be exiting Tiger Mandala Airlines. (See The Tiger retreats, Jan 4, 2013) Yet it was only in September last year that the Singapore-based budget carrier, which is 32.84 per cent owned by Singapore Airlines (SIA), raised its stake in the Indonesian joint venture to 35.8 per cent. But as Mandala continues to lose money, Tigerair may think it is time to stop throwing good money after bad. The investing airline lost nearly S$40 million (US$31.5 million) in the venture from April to December 2013.

Tigerair chief Koay Peng Yen attributed Tigerair’s very own poor performance to “industry overcapacity”. Yes, indeed, but equally so, it is a weak tiger that has been so maimed and lame that it is finding it tough to meet the competition. (See The Tiger maimed and lame, Jan 25, 2013) It has been a long, long struggle for Tigerair to recover, and taking on the additional burden of debt-ridden investments is certainly no way to fly. It is a pity that as Asean moves towards the full implementation of open skies next year, Tigerair cannot afford to continue bleeding. Exiting Tigerair Mandala will hardly raise a brow.

More interesting is the question: Will parent SIA let Tigerair go altogether?


About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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