Tigerair and Cebu Pacific to enter into wide-ranging strategic alliance

Tigerair and Cebu Pacific, the largest budget carriers based in Singapore and the Philippines respectively, have announced plans to enter into a strategic alliance. Both parties will collaborate commercially and operationally 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.

Subject to regulatory approval, the interline partners will jointly operate common routes between Singapore and the Philippines. As part of the strategic alliance, Tigerair will divest its 40% stake in Tigerair Philippines to Cebu Pacific.

Group CEO of Tigerair Mr Koay Peng Yen said, “Tigerair and Cebu Pacific share a vision for both airlines to join forces and create the largest budget airline network between Asia and the Philippines. This partnership with Cebu Pacific is consistent with our asset-light strategy, and builds upon our other alliances. We also look forward to achieving greater cost savings from the coordinated operations while providing more travel options and greater convenience for our customers.”

President and CEO of Cebu Pacific Mr Lance Gokongwei said, “This strategic alliance will allow both Cebu Pacific and Tigerair to leverage our extensive networks spanning from North Asia, ASEAN, Australia, India, all the way to the Middle East. Our customers can expect an even wider range of travel options, and seamless travel connections while enjoying our trademark low fares.”

To enhance the integration of operations, each carrier will 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.

As part of the strategic alliance, Cebu Pacific will acquire 100% ownership of Tigerair Philippines, including the 40% stake of Tigerair. Tigerair Philippines currently operates an average of 118 flights per week with five aircraft to 11 domestic and international destinations, from its bases in Manila and Clark. Cebu Pacific currently operates an average of 2,200 flights per week with 48 aircraft to 24 international and 33 Philippine cities in its network. By combining their resources, Cebu Pacific will be able to provide services to high growth markets including Australia and India. Tigerair will be able to fly more passengers to additional cities in Cebu Pacific’s extensive network in the Philippines and North Asia. This arrangement will allow both airlines to deploy capital more efficiently.

Highlights of strategic alliance
 Common routes
 Connectivity
 Corporate identity

Both carriers will jointly operate common routes between Singapore and the Philippines.

Both carriers will jointly sell and market their routes using interline arrangement, thereby expanding their network coverage and enhancing connectivity.

Both carriers will brand themselves as partners in their respective communication materials.

Upon completion of the divestment, Tigerair Philippines will initially continue to operate under the Tigerair brand.