Virgin, Tiger deal wins shareholder approval

Virgin, Tiger deal wins shareholder approval
By admin

Tiger Airways’ shareholders have approved Virgin Australia’s proposed acquisition of a 60% stake in Tiger Australia (TT), as the group’s chairman insisted the deal is the necessary fix for the struggling carrier.

Joseph Yuvaraj Pillay stressed that the group's Australian offshoot has yet to turn a profit after six years in operation, with the July 2011 suspension by the safety regulator "the final straw on TT's back".

"Despite valiant efforts since the resumption of services, TT has not been able to produce a turnaround," he said. "Just when TT had recovered its composure in terms of its operations, the market turned sour as a result of over-capacity."

Pillay described the carrier as "too small for the Australian market" and stressed that significant resources and a "strong partner" are required for it to achieve a critical mass. In addition, he pointed to Asia, rather than Australia, as the future for Tiger Holdings.

But the predicament of Tiger Australia is a "timely opportunity" for Virgin Australia, he continued.

"Having been in the budget space and vacated it, it is now a full-service carrier but with a strong desire to reenter the budget space," Pillay said.

The subsequent shareholder approval was welcomed by Virgin Australia, which yesterday received the green light from the competition regulator for its takeover of regional carrier Skywest.

"The positive shareholder vote represents another important step for Virgin Australia in completing the proposed transaction announced on October 30 2012," a Virgin statement said.

The deal remains subject to the approval of a number of other authorities such as the Foreign Investment Review Board and the Australian Consumer and Competition Commission.


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