Virgin announced the Tigerair purchase as it posted a first quarter net loss of $59.1 million.
Virgin Australia is planning to buy the remaining 40 per cent of loss-making low-cost carrier Tigerair Australia. By buying Tigerair, Virgin Australia will take total control of Tigerair Australia which will see the low-cost carrier becoming a wholly owned subsidiary of Virgin.
Chief executive John Borghetti said taking full ownership of Tiger would enable it to bring the discount carrier to profitability more quickly.
“Given the ongoing subdued consumer demand in the Australian domestic market, the growth of the Tigerair Australia domestic fleet is likely to be reduced,’’
John Borghetti, Virgin Australia CEO
Virgin is planning to keep Tigerair’s low cost business model and the separate brand. As part of the proposed acquisition, Virgin Australia will secure the brand rights to fly Tigerair Australia to a number of “short-haul international destinations” in addition to its current domestic-only network which will enable Tigerair to compete against Jestar.
Virgin Australia buys out Tigerair http://t.co/UsPoK64zCS
— BBC Business (@BBCBusiness) October 17, 2014