SYDNEY: Virgin yesterday took full control of budget carrier Tigerair Australia, buying the remaining 40 percent it did not already own for A$1 (88 US cents) from its Singapore-listed parent.
The deal was revealed as it was announced that Singapore Airlines (SIA) would take majority control of Tiger Airways — of which Tigerair Australia was a subsidiary — as part of a turnaround plan for the loss-making budget firm.
Virgin Australia purchased a 60 percent stake in Tigerair in mid-2013 for A$35m and said agreement had been reached to buy the rest of the carrier, which has struggled to reach profitability, for the tiny sum.
Tiger will continue to license its brand to Virgin. Virgin Australia chief John Borghetti said the acquisition would allow it to fly to a number of new short-haul international destinations, providing growth opportunities for the business, while accelerating Tigerair’s drive for profitability.
“Given the ongoing subdued consumer demand in the Australian domestic market, the growth of the Tigerair Australia domestic fleet is likely to be reduced,” he said.
“Under this proposed transaction, we will benefit from the economies of scale and achieve profitability ahead of schedule by the end of 2016, by leveraging the resources of the wider Virgin Australia Group.”
AFP
