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Virgin strengthens ties with Singapore, Tiger and Skywest

Virgin has announced plans to acquire a 60% stake in Tiger and a $47 million takeover of West Australian FIFO airline Skywest while Singapore Airlines will take a 10% stake in Virgin for $105 million.

 

Virgin and the Singapore Airlines-backed Tiger Airways is to spend more than $60 million upgrading the budget airline in Australia. Virgin’s chief executive John Borghetti said Tiger’s Australian operations would remain a stand-alone low-cost operation but Tiger Australia’s fleet will be boosted from 11 A320 planes to 35 over the next five years with eight of the new planes in service within two years.

Skywest’s planes will be rebranded as Virgin Australia but it will retain its head office in Perth and have its own management team.

Australian Foreign Investment Review Board approval has been obtained for the share purchase, which is expected to be completed on 16 November.

Butthe Australian Competition and Consumer Commission says it will closely monitor Virgin’s controlling stake in Tiger as it will remove a third competitor from the domestic aviation industry. ACCC’s chairman Rod Sims said whether the Tiger deal would lead to lower fares in the domestic travel market would be a determining factor.

Singapore Airlines and Virgin Australia entered into a long-term partnership last year, encompassing code sharing, reciprocal frequent-flyer program benefits and lounge access, co-ordinated schedules to provide seamless connections, and joint sales, marketing and distribution activities.

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