Cebu Pacific in talks to acquire TigerAir

MANILA, Philippines - Cebu Pacific is in talks for the possible acquisition of Tiger Airways, a senior official of JG Summit Holdings said yesterday.

BJ Sebastian, senior vice president and chief strategy officer of JG Summit which owns Cebu Pacific, said in an interview that the company is in talks with several groups including Tiger Airways for possible partnership or acquisition.

Sebastian did not reveal the details of the ongoing talks except to say that there is nothing definitive that can be disclosed.

Sebastian explained that the rationale behind efforts to look for possible strategic alliances and acquisitions is to take advantage of growth and profit opportunities.

 â€œObviously there are growth and profit opportunities in possible alliances and acquisitions. This would improve the profitability of the airline,” he said.

Cebu Pacific is in the middle of a $4-billion refleeting program involving the acquisition of 49 brand new Airbus aircraft in preparation to mount more long-haul flights to major destinations including Europe and the US. The airline is scheduled to take delivery of 15 more brand-new Airbus A320, 30 A321neo, and four A330 aircraft between last year and 2021.

The low cost carrier has a fleet of 48 Airbus aircraft consisting of 28 A320, 10 Airbus A319, two Airbus A330 and eight ATR-72 500 aircraft.

It is gearing up for possible flights to the US and Europe as the Civil Aviation Authority of the Philippines (CAAP) continued to address aviation safety concerns.

The airline’s plan to seek the green light from the European Union to fly to the European airspace in November got derailed after Super Typhoon Yolanda battered several provinces in the Visayas last Nov. 8.

The EU which lifted the ban on national flag carrier Philippine Airlines (PAL) last July allowing it to fly to London last Nov. 4 is set to tackle Cebu Pacific’s application in March next year.

The US Federal Aviation Administration (US-FAA) is expected to make an

announcement on the upgrade of the country’s status back to Category 1 in sometime in January after it was downgraded to Category 2 in 2008 after CAAP failed to comply with safety standards for the oversight of air carrier operations.

Cebu Pacific operates an extensive network serving 33 domestic routes and 24 international destinations.

On the other hand, TigerAir is looking at beefing up its existing fleet of five Airbus aircraft to 25 over the next three to five years as it sets up hubs in various parts of the country particularly at the Clark international airport in Pampanga,

Singapore-based Tiger Airways Holdings Ltd through wholly-owned subsidiary Roar Aviation II Pte Ltd acquired a 40-percent stake in South East Asian Airlines Inc. (Seair) for a total consideration of $7 million in August 2012 while a group of Filipino businessmen retained 60 percent.

 TigerAir, established in 2004, is a leading Singapore-based no frills airline that offers affordable travel options and a seamless customer experience. Tigerair comprises four airlines, namely Tigerair Singapore, Tigerair Australia, Tigerair Philippines, and Tigerair Mandala.

Collectively, TigerAir’s network extends to over 50 destinations across 13 countries in the Asia Pacific. As at Aug. 31, it operates a fleet of 48 Airbus A320 averaging less than three years of age.