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Tiger establishes Philippine franchise

Tiger has for some time been seeking partnerships with other airlines in Asia to enable it to establish bases elsewhere, effectively giving it a way around strict ownership and control restrictions.

Tiger's Clark base will be established through a franchise deal with small Philippine carrier Seair. Under the agreement, Tiger will lease two Airbus A320s to Seair and they will be based at Clark, located just outside the Philippine capital. Seair will operate them under its own flight code but tickets will be sold through Tiger's website. Aircraft will be painted in Tiger's livery.

The tie-up is expected to take effect in February and services will initially be operated between Clark and both Cebu and Davao within the Philippines. Flights will later also be operated between Clark and both Singapore and Macau, followed by other countries.

Chief executive Tony Davis says Clark is the first of four or five bases Tiger expects to establish over the next two or three years in other countries.

While it will not be taking equity in Seair as part of the deal, "that might change in future", says Davis. "I expect other partnerships like this in future," he adds. "Tiger Airways is not a Singaporean airline, it is an ASEAN airline and we see our market as Asia," he says, referring to the Association of Southeast Asian Nations political grouping, which includes 10 countries.

New airlines in Asia with aspirations to expand throughout the region have been finding it difficult to grow into other markets due to restrictive bilateral air services agreements and ownership restrictions in most markets that cap foreign shareholdings at 49%.

Malaysia's AirAsia has been the most innovative in finding a way around the restrictions, having set up affiliates in Indonesia and Thailand. These are majority owned by local shareholders. AirAsia also has been in talks with carriers in Sri Lanka and Bangladesh. Davis will not say what other markets Tiger has been looking at establishing joint-venture airlines in, but Indonesia and Vietnam are seen as possibilities.

The carrier currently operates only seven Airbus A320s but will add five more by the end of 2007. In October it placed an order for another eight to be delivered in 2008-2010.




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