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How Do You Dismount a Tiger?

Tiger Airways Warns it May Close Tiger Mandala Indonesian Operation if Financial Performance Does not Improve this Year

(3/10/2014) Reuter’s reports that Singapore-based Tiger Airways is saying that it will sell or close its Indonesian joint-venture with Mandala Airlines unless the airline shows signs of a strong turnaround before the end of 2014.

PT Mandala Airlines resumed flight operations in 2012 after an extended grounding during which the company was restructured and Tiger purchased a one-third share.

Tiger
later upped its shareholding giving 51% shareholding to Tiger and the Indonesian private equity form Saratoga.

The newly formed Tiger Mandala Airways managed to lose US$31.6 million in the period April-December 2013. And Tiger and Saratoga are reportedly unprepared to invest more in the airline without proof that a financial turnaround is underway.

Tiger Mandala suspended nine routes in February, effective closing 40% of its flight operations in an effort to stop the financial hemorrhaging at the airline.

Tiger has demonstrated its ability to make tough financial decisions as demonstrated by its decision in January to sell its state in the Philippine carrier Cebu Pacific that was also under performing financially.

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