Tiger to sell off to Virgin
Tiger Airways has announced it will sell 60 per cent of its Australian operations to Virgin Australia for a cash consideration of $35 million.
The sale will see the formation of a joint venture between the two airlines, which Tiger says will lead to a significant strengthening in its Australian operations.
With two strong shareholders, Tiger Australia will be better-positioned to tap opportunities for further expansion in terms of fleet and market reach. Tiger Australia will more than triple its fleet of Airbus A320s in five years,” Tiger Airways said in a statement.
Tiger Australia will continue to operate under the Tiger Airways brand through a annual licence to its parent company.
“This is a significant step forward for us. The joint venture will bring about a stronger and more competitive Tiger Australia, and allow us to deploy more capacity and attractive budget offerings to our customers,” Group CEO of Tiger Airways Koay Peng Yen said.
Tiger Australia currently operates 11 aircraft on approximately 450 flights per week, to nine Australian destinations, including its headquarters in Melbourne and its second base in Sydney. Virgin Australia currently operates 106 aircraft on approximately 3,000 flights per week, to 51 Australian and international destinations.
Mr John Borghetti, CEO of Virgin Australia Holdings, said, “This transaction enables Virgin Australia to access the budget market and enables Tiger Australia to expedite its growth, providing greater competition to this important market segment.
“By partnering with Tiger Airways, we can use our expertise to leverage Tiger Australia’s competitive cost base and build a sustainable budget carrier. We are committed to maintaining the Tiger Australia business model and brand, and we look forward to collaborating with Tiger Airways as the business grows”, Mr Borghetti said.