Citilink and Indonesia AirAsia have both dropped their respective plans to acquire Tigerair Mandala, according to a Jakarta Globe report. Quoting unnamed sources close to the negotiations, the paper said Citilink pulled out when it came to the conclusion that acquiring the Tigerair (Singapore) subsidiary would give it no competitive advantage over the opposition. “Citilink has had a look at Mandala over the last few weeks and decided that a deal would not make any sense,” said one of the sources.
“Acquiring Mandala will not improve Citilink’s network or give it an advantage against Lion Airlines, the market leader.”
Similarly, AirAsia told Reuters in a statement that it too had dropped its Tigerair Mandala designs and instead will instead pursue existing investments in the country which this year, will amount to more than US$300 million. “We would like to confirm that we evaluated to purchase Mandala. And after a long search have decided not to pursue this transaction,” AirAsia Group chief executive Tony Fernandes said.
Tigerair, 40 per cent-owned by fullservice carrier Singapore Airlines, is one of the smaller budget airlines in the region and due to its lack of scale, has not been able to bring down its operating costs to a sufficient level to make profits.