Cebu Pacific Completes Acquisition of Tigerair Philippines

Cebu Pacific has announced that it has completed its $15 million acquisition of Tigerair Philippines from Singapore-based Tiger Airways Holdings and other Philippine shareholders. 

tigerair cebu pacific
Copyright Photo: Angelo Agcamaran/PPSG
"Cebu Pacific wishes to announce that the said sale and purchase of shares has been completed on March 20, 2014," the airline announced in a publicly released disclosure. "Cebu Pacific has secured the approval of the Civil Aeronautics Board, and is now in the process of seeking congressional approval."

According to Marcelino Teodoro, Chairman of the House of Representatives Committee on Legislative Franchises, Tigerair Philippines operates under a franchise to maintain domestic and international air transport services. However, it is not legally permitted to sell or assign the franchise privileges without the prior approval of the Congress of the Philippines.

"A House resolution would be needed to approve any transfer, sale, or assignment of the controlling interest of Tigerair Philippines to Cebu Pacific Air," said Teodoro. He added that such a measure needs to pass through the routine public hearings and deliberations at plenary and committee levels. "As of now, none has been filed yet. We'll take it up once a resolution is referred to the committee, maybe when session resumes in May."

With the completion of the transaction, Tigerair Philippines will continue to operate under the Tigerair brand into the immediate future.The alliance of the two companies will create the largest budget airline network between the Philippines and Southeast Asia. Using interline agreements, the two airlines plan to tap into each other's extensive route networks to expand their reach with increased flight frequencies and joint sales of routes. Tigerair will tap into Cebu Pacific's extensive Philippine and North Asia network while Cebu Pacific will leverage Tigerair's network to Australia and India. 

The carriers plan to jointly operate common routes between Singapore and the Philippines providing even more travel options for customers. However, that plan is subject to the approval of the Competition Commission of Singapore. Meanwhile, flights of Tigerair Philippines and Cebu Pacific can now be booked on the Cebu Pacific website and through other Cebu Pacific booking channels effective March 20. 

Tigerair passengers that booked their flights prior to March 20 can now also make changes through Cebu Pacific ticket offices and telephone reservation lines. Tigerair Singapore continues to work on upgrading its website to enable bookings of Cebu Pacific flights in order to facilitate joint marketing and sales. When the alliance is fully implemented, both the Tigerair and Cebu Pacific websites will be used as joint sales and distribution platforms to market all routes served by both airlines. 

"The strength of the alliance lies in our ability to offer our trademark lowest fares to the largest low cost network to, from, and within the Philippines," said Cebu Pacific President Lance Gokongwei. "The alliance gives us an opportunity to serve new markets, like India and Australia, as we expand our route network with Tigerair."

Tigerair Philippines will continue operating from Ninoy Aquino International Airport Terminal 4 while Cebu Pacific will remain operating from NAIA Terminal 3. Tigerair Philippines has returned two A319 aircraft to Tigerair Singapore, while Cebu Pacific has entered into a short term lease with Tigerair Singapore to permit Tigerair Philippines to continue operating the remaining three A320 aircraft. Meanwhile, Tigerair Philippines is seeking regulatory approval for the lease of aircraft from Cebu Pacific. The airline has a pending application for the lease of one Cebu Pacific A320 aircraft. 

According to Olive Ramos, President of Tigerair, the airline returned its two A319 aircraft to Tigerair Singapore on March 18. The new aircraft from Cebu Pacific will be used for domestic flights from NAIA Terminal 4. Cebu Pacific plans to maintain Tigerair Philippines' existing route network with a fleet of four A320 aircraft for the time being. 

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