CAB okays Cebu Pac-TigerAir deal

MANILA, Philippines - State-run Civil Aeronautics Board (CAB) has given Cebu Air Inc. (Cebu Pacific) the green light to acquire 100 percent of low cost carrier Tiger Airways Philippines.

CAB executive director Carmelo Arcilla said the regulator has approved the proposed take over by Cebu Pacific of Tigerair Philippines early this week.

“Yes, it was approved last Monday,” Arcilla said in a text message.

He added that the transaction will have to be approved by Congress as well as the Securities and Exchange Commission (SEC).

“So they will go the SEC and Congress for the necessary approval,” Arcilla explained.

Last January, Cebu Pacific president and chief executive officer Lance Gokongwei announed it entered into a $15-million share purchase agreement and strategic alliance with TigerAir to create the biggest network of flights in the region.

Gokongwei said the budget airline is spending $7 million to acquire the 40-percent share of Tiger Airways Singapore Pte. Ltd. and $8 million for the 60 percent owned by Filipino businessmen in Tigerair Philippines.

Cebu Pacific – a unit of flagship JG Summit Holdings Inc. – would finance the acquisition through internally generated funds.

The strategic alliance would allow both Cebu Pacific and TigerAir to leverage on our extensive networks spanning from North Asia, ASEAN, Australia, India, all the way to the Middle East.

Both airlines agreed to jointly operate common routes between Singapore and the Philippines, and other markets; jointly sell and market common and non-common routes using codeshare or interline arrangements; and cooperate in relation to sales and marketing, distribution, airport operations and ground handling, scheduling, pricing, service policies, innovation, procurement and other matters to improve the overall quality of service offered to passengers on their respective operations and to reduce cost.