Monday, February 24, 2014

Cebu Pacific-Tiger Air Acquisition Approved by CAB

The Civil Aeronautics Board has approved Cebu Pacific's acquisition of Tigerair Philippines in a deal worth $15 million. According to Carmelo Arcilla, Executive Director of the Civil Aeronautics Board, the deal is now subject to the approval of Congress and the Securities and Exchange Commission. 

cebu pacific tigerair
Copyright Photo: Angelo Agcamaran/PPSG
"They will go to the SEC and Congress for the necessary approval," said Arcilla. Cebu Pacific announced the fifteen million dollar share purchase agreement and strategic alliance with Tigerair in January. The new alliance is expected to create Asia's largest network of flights to and from the Philippines.

Cebu Pacific will be acquiring 100 percent of Tigerair Philippines. It will be spending $7 million to acquire the 40 percent share held by Tiger Airways of Singapore and another $8 million for the 60 percent share owned by Filipino businessmen.

As part of the initial phase of the strategic alliance, the two carriers will be adopting a common booking system as early as mid-March to enable passengers to access flights of Tigerair Philippines through the Cebu Pacific website and other reservation channels. Cebu Pacific flights are also expected to be available through the Tigerair website in the near future.

Cebu Pacific will be gradually transferring Airbus A320 aircraft from its fleet to Tigerair Philippines as the previous five aircraft used in the local Tigerair fleet will need to be returned to its former Singapore based parent airline. Lance Gokongwei, President & CEO of Cebu Pacific, says the new alliance will serve customers of both carriers as the largest low cost network to and from the Philippines. "As we enter the initial phase of the alliance, we will continue to leverage on our extensive route networks, flight frequencies and find ways to provide an even wider range of travel options for all of our customers," said Gokongwei.

Cebu Pacific now controls the largest number of slots at the congested Ninoy Aquino International Airport in Manila. It operates more than 2,200 flights with its existing fleet of 49 aircraft to 33 Philippine destinations and 24 international cities. Tigerair Philippines serves 11 international and domestic destinations with a fleet of five Airbus aircraft from its hubs in Manila and Clark International Airport. The carrier operates approximately 118 scheduled flights per week.

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