SIA set to get bigger say in Tiger with new CEO
TIGER Airways is replacing its chief executive with a Singapore Airlines board member, in a sign that its largest shareholder will wield greater influence at the troubled budget carrier.
Yesterday's move came less than a week after Tiger reported that losses ballooned in its last financial year and as Singapore Airlines, which owns 40 per cent of Tiger, pushes a strategy of expanding its exposure to the fast-growing Asia-Pacific market and the low-cost segment.
"They'll try to see where Tiger fits into all this, and make better sense of what is happening and how differently they can go forward in that particular segment," said aerospace consultant Sagar Ashok at Frost & Sullivan.
Tiger CEO Koay Peng Yen's resignation will become effective on Monday, The Business Times reported. He will be replaced by Lee Lik Hsin, who has served on the Tigerair Board as a representative of SIA.
Mr Lee, a 20-year veteran of SIA, has served in various positions in SIA's head office and overseas, including Beijing, San Francisco and Tokyo.
He is also Singapore Airlines Cargo's president, a role he has held since August, and, before that, senior vice-president of Singapore Airlines' corporate planning since early 2011.
Tiger is one of two budget airlines within the Singapore Airlines group, which also has a medium-haul unit, SilkAir, and its namesake premium long-haul carrier service.
Unlike Scoot - its fully owned medium- to long-haul budget airline - and SilkAir, Tiger has always operated as an independent entity.
"The group will align all these airlines so as to have a coherent strategy going forward. So each airline benefits from the other airlines and they really don't compete on routes, (but) have flight schedules which go hand in hand with the other airlines and things like that," said Mr Ashok.
Unlike bigger rivals such as AirAsia and other low-cost airlines including Qantas Airways-owned Jetstar and Garuda-owned Citilink, Tiger has scaled down its ventures in highly competitive markets to cut losses.
Under Mr Koay, Tiger sold its loss-making Philippine business and said last week that it was reviewing its investment in its Indonesian joint venture.
Last week, Tiger said its losses widened to $223 million in the year ended March, from $45.4 million a year ago, as it booked charges and accounted for losses from its operations in countries including Indonesia and Australia.