Business
Virgin Australia will buy out loss-making budget carrier Tiger Airways Australia for A$1 (£0.54). The BBC writes:
Virgin already has a 60% stake in Tiger but will take full control in an effort to speed up a turnaround, it said. "We will benefit from the economies of scale and achieve profitability ahead of schedule by the end of 2016," said chief executive John Borghetti.
Virgin bought its first stake in the venture from Singapore's Tiger Airways for A$35m last year.
Tiger Airways, however, has struggled to win customers in a slumping domestic market. "Given the ongoing subdued consumer demand in the Australian domestic market, the growth of the Tigerair Australia domestic fleet is likely to be reduced," Mr Borghetti said in a statement.
Cash-rich Singapore Airlines Ltd (SIA) is injecting up to $110 million to take control of loss-making affiliate Tiger Airways Ltd, shoring up the budget carrier while scrapping its regional ambitions as competition rages. Reuters:
Announcing a record quarterly loss that sent its shares tumbling as much as 10 percent, Tiger said on Friday that SIA will raise its stake to about 55 percent from 40 percent by converting existing securities into shares.
Tiger then plans an up to S$234 million ($184 million) rights issue, with SIA buying up to S$140 million of new shares and possibly raising its stake to as much as 71 percent. The low-cost airline also agreed to sell its remaining 40 percent stake in its Australian unit to Virgin Australia Holdings for just A$1. Months after it shut down its Indonesian venture and sold its Philippine business, the sale clips Tiger's wings back to those of a Singapore-focused carrier but leaves questions on how it will secure growth.
