CAB Delays Renewal of Tigerair Permit

The Civil Aeronautics Board is considering a delay in the renewal of the permit that allows Tigerair Philippines to operate in the country in light of its recent acquisition by Cebu Pacific. 

Photo Credit: Clark International Airport

According to Maria Elben Moro of the Civil Aeronautics Board, the hearing for the renewal of the airline's Certificate of Public Convenience and Necessity may be postponed as a result of pending changes to the documents that will be submitted.  "The counsel of Tigerair Philippines said they may request for a new schedule," said Moro. 

The hearing was originally scheduled for January 23 with Tigerair's permits set to expire in April. Moro added that Cebu Pacific and Tigerair have yet to file an application for the sale of shares of Tigerair. It was announced earlier this month that Cebu Pacific had formed a strategic alliance with Singapore-based Tiger Airways Holdings that would involve Cebu Pacific acquiring 100 percent of Tigerair Philippines including the 40-percent that was held by Tiger Airways Holdings in Singapore. 

Tigerair and Cebu Pacific plan to cross-sell flights through each other's distribution networks and websites. Cebu Pacific has indicated that it intends to operate Tigerair Philippines as a separate entity and that the current management team would remain in place. However, it remains uncertain if the carrier will rebrand in the future.

"If they do file, definitely there would be clarificatory hearings with respect to the competition," said Moro. "At the onset, what we are seeing is that there's no significant effect because Tigerair does not have ganong kalaking market at least in the domestic and regional markets."

Industry observers are expecting for the deal to push through as carriers in the country look to consolidate to restore profitability and rationalize competition in the market. The deal is not expected to have a severe impact on consumers as Tigerair Philippines currently holds only 5 percent of the domestic market compared to 51 percent held by Cebu Pacific. Philippine Airlines holds 34 percent while AirAsia holds 10 percent. 

Image Source: Tigerair Philippines