Cebu Pacific Air’s acquisition of low-cost-carrier peer Tigerair Philippines has cleared its first hurdle: getting the approval of the Civil Aeronautics Board (CAB).
CAB executive director Carmelo Arcilla told PortCalls in a text message that takeover agreement between the two airlines “was approved last Monday (February 17).”
Cebu Pacific early in January acquired Tigerair for US$15 million by way of a strategic alliance with the Philippine unit of Singapore’s Tiger Group.
Arcilla said the CAB’s approval was just one hurdle the deal had to clear, and two more are waiting down the road.
“So they will go next to the SEC (Securities and Exchange Commission) and Congress for the necessary approvals,” Arcilla said.
Cebu Pacific had earlier said the first phase of its acquisition of Tigerair Philippines had been sealed with a share purchase agreement with the latter’s parent firm, Tiger Airways Holdings Ltd. of Singapore.
Under that deal, Cebu Pacific agreed to acquire 100% of Tigerair, including the 40% stake of the Tiger Group in the local carrier.
Tigerair Philippines will retain its brand but collaborate commercially and operationally with Cebu Pacific on international and domestic air routes to and from the Philippines, thereby creating the biggest network of flights to the region. The carriers also expect to team up on other common destinations in Asia.
Upon full implementation of the alliance, both carriers will use each other’s websites as sales and distribution platforms to market all routes they operate.
The alliance will also allow Cebu Pacific to provide services to high-growth markets including Australia, Myanmar, and India, while Tigerair will be able to fly more passengers to additional cities in Cebu Pacific’s network in the Philippines and North Asia.
This arrangement allows both airlines to deploy capital more efficiently, Cebu Pacific said.
Cebu Pacific operates over 2,200 flights a week to 24 international and 33 Philippine cities using 49 aircraft while Tigerair Philippines operates about 118 flights per week to 11 domestic and international destinations from its bases in Manila and Clark.––Roumina M. Pablo
Photo from https://www.facebook.com/cebupacificair/photos
