A SpiceJet spokesperson has confirmed that its year old passenger inter-line agreement with Singapore based low cost carrier TigerAir has been “terminated based on mutual decision [since SpiceJet’s] network changes made it no longer commercially worth doing.”
As per reports in The Business Standard and The Economic Times, Tiger had terminated the agreement due to SpiceJet’s “non-performance”. The financially troubled Indian carrier had apparently met less than 30% of its revenue targets, and due to financial troubles which constrained its network, was not able to synchronise flight schedules with Tiger.
Financial troubles are not limited to SpiceJet alone. TigerAir is taking a massive $110 million cash injection from its largest shareholder Singapore Airlines, which will see the latter increase its stake first to 55% and then to as much as 71%. TigerAir will sell its stake in TigerAir Australia to partner Virgin Australia for a token A$1 ($0.88). Tiger has already sold its share in its Philippines venture to Cebu Pacific and closed its Indonesian venture, Mandala.
Singapore Airlines is also a 49% shareholder in India’s newest airline, Vistara, which coincidentally is also based in New Delhi as is SpiceJet.