, Singapore

Will SIA ever privatise Tigerair?

It will only need to spend $400m for such a move.

Tigerair is a long way away from full profitability, but its parent Singapore Airlines may benefit from privatising its floundering subsidiary.

According to DBS, SIA will only have to shell out less than $400m to buy the remaining 44% of Tiger’s relatively cheap stock. With a war chest worth $3.5b, DBS believes that a privatisation will not dent SIA’s cash hoard.

Privatisation will also allow SIA to fully benefit from the better returns and growth prospects from the LCC space, especially since Tiger has divested all its loss-making overseas ventures and has greater collaboration with Scoot.

“Given that acquisition opportunities in other markets may not be that easy or forthcoming, this could be a small step for SIA in better utilising its balance sheet,” stated DBS.  

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