Tigerair has sold its 40% stake in Tigerair Philippines to Cebu Asia Pacific (CEB), who will acquire the remaining 60% owned by local investors.
Tigerair and CEB will retain their individual identities for the time being, and will collaborate on operational and marketing fronts, as well as cross-sell domestic and international routes.
CAPA, the Centre for Asia Pacific Aviation, said Cebu Pacific’s acquisition of Tigerair Philippines would cement its leading position in the Philippine domestic market and result in another round of consolidation in a market "which has at times suffered from irrational competition".
CAPA added: "Domestic trunk routes would be left with competition from only three airline groups – Cebu Pacific, Philippine Airlines (PAL) and AirAsia – compared to five one year ago.
"Philippine authorities will need to determine if three players are sufficient to maintain competition. With no available slots at Manila, it will be nearly impossible for a new carrier to enter the market."
CAPA said selling its loss-making Philippine affiliate would be a smart strategic move for Tigerair as it would allow the LCC group to focus on launching an affiliate in Taiwan and growing in Australia and Indonesia, "bigger markets of more strategic importance".
