IT'S OFFICIAL | Cebu Pacific set to take over Tigerair Philippines
MANILA - (UPDATE 2, 10:34 a.m.) Cebu Pacific has officially announced that it will be taking over the Philippine unit of Singapore-based Tiger Airways.
In a disclosure to the Singapore Stock Exchange, Tiger Airways Holdings said it entered into a strategic alliance with Gokongwei-led Cebu Pacific, with the latter acquiring 100 percent of Tigerair Philippines, including the 40-percent stake of its parent firm.
The largest budget carriers in Singapore and the Philippines have already announced plans to enter into a wide-range strategic alliance such as commercial and operational collaboration on international and domestic air routes from the Philippines, thereby creating the biggest network of flights to the region.
The alliance will enable both parties to leverage their respective strengths and harness synergies to enhance their network coverage, flight frequencies and customer service, and jointly market their routes using interline arrangement.
Earlier, InterAksyon.com reported that Cebu Pacific was in talks with its Singaporean counterpart for the said deal. This was confirmed by Carmelo Arcilla, executive director of the Civll Aeronautics Board (CAB) to InterAksyon.com, saying Cebu Pacific has filed an application to acquire 100 percent of Tigerair.
He said CAB is evaluating the planned buyout, adding that the agency expects to complete the review in the next two weeks.
According to industry experts, the acquisition of Tigerair Philippines give the Cebu Pacific additional slots at the country's main international gateway, as well as bump up its local and foreign traffic rights and destinations.
"It's a classic move. Mergers and acquisition (M&A) is a way of expanding the operation of the company," Avelino Zapanta, former president of Southeast Asian Airlines (Seair) and president of Seair International, said.
"They [Cebu Pacific] will win additional slots because there's congestion and slotting problems in Manila. [With the acquisition] suddenly may windfall of slots," Zapanta said.
With the development of alternatives to the Ninoy Aquino International Airport (NAIA) stalled, winning more slots at the country's main international gateway has fueled M&As.
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