CebuPac sees no regulatory issues on buyout of TigerAir

MANILA, Philippines - Cebu Air Inc. (Cebu Pacific) of taipan John Gokongwei is confident of getting a regulatory approval for the $15-million buyout of Tiger Air Philippines amid concerns about competition.

Cebu Pacific president Lance Gokongwei sees no hindrance in the proposed buyout that would create the largest network of flights in the Asia Pacific region as the budget airline would comply with all the requirements of various regulators led by the Civil Aeronautics Board (CAB).

 â€œWe don’t anticipate any such issues but again we reiterate that we will be working very closely with providing the necessary information that the regulators require to make their respective rulings,” Gokongwei said.

Gokongwei announced Wednesday that Cebu Pacific was spending $15 million to acquire the 40-percent interest of Tiger Airways Singapore Pte. Ltd. and the 60 percent shareholdings of Filipino businessmen.

 â€œWe will comply with all the regulatory requirements of this deal,” he said.

According to him, Cebu Pacific would retain the Airline Operators Certificate (AOC) of Tigerair Philippines on the first year to fulfill the commitment made by the low cost carrier to its passengers.

 â€œOur objective here is of course to retain the current AOC of Tigerair and to fulfill all our commitments to all the passengers of Tigerair Philippines who have enjoyed the various offerings and schedules of Tigerair,” he explained.

Carmelo Arcilla, executive director of CAB, said the regulator would look into the “anti-competitive” impact of the impending full takeover by Cebu Pacific of Tigerair Philippines

 â€œWe do not see that the competition would adversely be affected. Tigerair is a very small airline with a small market share,” Arcilla said.

Regional think tank Centre for Asia Pacific Aviation (CAPA) earlier said the deal between Cebu Pacific and Tigerair Philippines could influence long-term competition due to the limited slots at the Ninoy Aquino International Airport (NAIA).

 â€œCebu Pacific’s potential 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 said in an analysis dated Jan. 7.

CAPA said Cebu Pacific’s share in the domestic market would increase to about 56 percent from the current 51.2 percent as Tigerair Philippines has a share of 4.8 percent in the domestic market.