Manila—(PHStocks)—Tigerair and Cebu Pacific (PSE: CEB), the largest budget carriers based in Singapore and the Philippines respectively, have entered into a strategic alliance, wherein both parties will collaborate commercially and operationally on international and domestic air routes to and from the Philippines, thereby creating the biggest network of flights to the region.
The alliance will allow both carriers to harness synergies and efficiencies to enhance their network coverage, flight frequencies and customer service, and jointly market their routes using codeshare and interline arrangements. Subject to regulatory approval, the alliance will jointly operate common routes to and from Singapore and the Philippines.
Group CEO of Tigerair Koay Peng Yen said, “Tigerair and Cebu Pacific share a vision for both airlines to join forces and compete more effectively in the regional market. Through this strategic alliance, we aim to establish a win-win partnership to forge a more competitive Tigerair. 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, Lance Gokongwei, said, “This strategic alliance will allow both Cebu Pacific and Tigerair to leverage on 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. Both Tigerair and Cebu Pacific websites will be used as sales and distribution platforms to market all routes operated by both airlines. The carriers also expect to collaborate on other common destinations in Asia.
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 102 flights per week with five aircraft to 12 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 allows both airlines to deploy capital more efficiently.