Homegrown budget carrier Cebu Pacific has officially announced its acquisition of Tigerair Philippines to compete more effectively in the regional market.
According to a disclosure to the Philippines Stock Exchange, Cebu Pacific will be paying $15 million to seize the 40% stake held by the parent company Tiger Airways Holdings and the remaining 60% owned by Filipino investors led by businessman Tomas Lopez.
Tiger Airways said that its stake in 40% of Tigerair Philippines will be sold at $7 million in a separate statement to the Singapore Stock Exchange,
The largest budget carriers based in Singapore and the Philippines expect to create āthe biggest network of flights to the regionā with their combined fleet, sales and marketing muscle that can now reach from North Asia, ASEAN, Australia, India and all the way to the Middle East.
Each carrier is expected to brand itself as partner of the other airline, while Tigerair Philippines will initially continue to operate under the Tigerair brand upon completion of the divestment. Both Tigerair and Cebu Pacific websites will be used as sales and distribution platforms to market all routes operated by both airlines.
Tickets will be sold following codeshare and interline arrangements. Interline deals allow two or more airlines to issue tickets on behalf of each other while code sharing involves flights operated by one airline but the seats are sold by both partners.
Tigerair Philippines currently operates an average of 118 flights per week with five aircrafts to 11 domestic and international destinations, from its bases in Manila and Clark. It is formerly known Ā as Ā Seair, after Tiger Airways acquired 40% of the company in August 2012, renaming it to Tigerair Philippines last June.
Cebu Pacific operates an average of 2,200 flights per week to date with 48 aircraft to 24 international and 33 Philippine cities in its network.