Tiger Airways shuts loss-making Indonesian airline
SINGAPORE — Tiger Airways Holdings, the unprofitable carrier part-owned by Singapore Airlines, said yesterday it is shutting its loss-making Indonesian operations, as the budget airline tries to restructure operations
Tigerair Mandala will cease operations from July 1, Tigerair said in a statement to the Singapore stock exchange yesterday. Mandala would not be able to sustain its operations and the airline’s key shareholders decided to cease funding the carrier, it said. The Singapore-based budget carrier had last year increased its stake in the venture to 35.8 per cent.
“Together with the Saratoga Group and PT Cardig International, the key ultimate shareholders of Mandala have vigorously explored various options in recent months,” Tigerair said. “The partners concluded that Mandala would not be able to sustain its operations. As a result, they have decided to cease funding the airline.”
Tigerair, 40 per cent owned by Singapore Airlines, has found it especially difficult to sustain a profitable overseas presence. It has over the past year sold 60 per cent of its Australian unit and withdrawn entirely from Tigerair Philippines.
Through Mandala, Tigerair had a small share of Indonesia’s fast-growing low-fare market, overwhelmingly dominated by Lion Air and flag-carrier Garuda Indonesia, which are adding routes and ordering more aircraft.
It had been looking to sell its shares in Mandala to cut its overseas exposure and focus on returning to profitability. But reports earlier this month said Malaysia’s AirAsia and Indonesia’s Citilink ended talks to acquire the airline.
“Mandala’s financial results reflect the challenges that it is facing in the difficult operating environment,” said Tigerair chief executive officer Lee Lik Hsin in the statement. He added that the carrier will continue to maintain an active presence through Tigerair Singapore. Agencies