Tiger announces Virgin partnership - ABC News (Australian Broadcasting Corporation)
Tiger Airways says it is selling a 60 per cent stake in its Australian operations to Virgin Australia for $35 million.
Tiger Australia will also pay an undisclosed annual license fee to Tiger's Singapore-listed parent company for at least 20 years for use of the brand, with the fee based on a fixed percentage of gross revenue.
The Australian company will also pay its Singaporean parent $5 million if it achieves certain financial performance targets within five years.
Tiger and Virgin have agreed to invest up to a further $62.5 million between them to grow the low-cost Australian carrier, with plans to expand the fleet from 11 aircraft currently up to 35 by 2018.
Virgin Australia has been repositioning itself as a premium airline brand to compete in the business traveller market against Qantas, and its chief executive John Borghetti says this deal will keep a strong foothold in the budget travel market.
"This transaction enables Virgin Australia to access the budget market and enables Tiger Australia to expedite its growth, providing greater competition to this important market segment," he said in a statement.
The companies say Tiger Australia will be managed as a standalone business, with John Borghetti as its inaugural chairman under the new structure, and the position to be rotated every two years
Any truth to the rumour that a 'MOU' is being drafted as we speak regarding the use of Virgin crews transfering over to Tiger to help with the rapid expansion plans?