SIA Holding acquired early February 90% of the shares in low cost carrier Tigerair, a move which is strengthening the airline’s position in the low cost airlines market from and to Singapore. Tigerair own quotation at Singapore Stock Exchange has been consequently suspended as the low cost carrier is now becoming part of SIA Group strategy.
The financial change in Tigerair ownership will rapidly translate into concrete. Especially with Singapore Airlines looking now to strengthen its low cost activity by creating synergies between Tigerair and Scoot, SIA long haul budget affiliate. SIA Holding will then develop two parallel products: a “premium” offer consisting of Singapore Airlines and Silk Air and a “budget” offer consisting of Scoot and Tigerair.
One of the first tasks will be to harmonize the network and facilitate connections between both Scoot and Tigerair. Tigerair and Scoot operate together to 51 destinations in Asia and Australia with only four points being served by both carriers (Bangkok, Guangzhou, Hong Kong and Taipei). An interline agreement has been signed two years and a half ago by both carriers which allowed both carriers to sell connecting flights. However, the interline agreement is technically limited.
Next April, Tigerair will officially immigrate its entire booking system into Scoot booking platform, giving the possibility to connect to all the destinations served by both carriers. Currently, only 5% of passengers flying on Scoot out of Singapore come from a connecting flight. The move is a first step to a possible merge of both carriers in the longer term. Brands are good but to multiply them is probably confusing at the end for passengers.
Thanks to the complete acquisition of Tigerair, the SIA group is again dominating its Singapore home market as it offers around 50.5% of all the available seats out of Changi International Airport.