Why exiting Indonesia is a good move for Tigerair

Tigerair Mandala has only a 1-2% market share.

According to OCBC Investment Research, it is positive on a Tigerair Mandala sale.

Here's more:

In 2012, Mandala Airlines (later rebranded TRM) underwent a financial restructuring, during which TR bought a one-third stake. TR's stake was brought up to 35.8% in Sep 2013. Saratoga, an Indonesian PE firm, owns 51% of TRM.

Both Saratoga and TR are reportedly not interested in increasing their investments in TRM.

We would be positive on a TRM sale. The carrier lacks the economies of scale for Indonesian market, which is facing increasing overcapacity.

TRM has only a 1-2% market share, in stark contrast to Lion Air (46%) and Garuda Indonesia (28%), according to CAPA Centre for Aviation. A potential sale is not surprising, given that TR has been reducing its exposure to the other loss-making cubs.

TR sold a 60% stake in Tigerair Australia in Jul 2013 to Virgin Australia and in Jan this year, it entered an agreement to sell its full 40% stake in Tigerair Philippines to Cebu Air, the parent of Cebu Pacific. In an article dated 19 Feb, CAPA reported that TRM is reducing its total number of flights by 42% and more than halving the number of routes being operated (19 at the beginning of the year), by mid-Mar.

CAPA cites TRM CEO Paul Rombeek as saying that on an available seat kilometres (ASK) basis the shrinkage will be 30%.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia