| SINGAPORE, March 3
SINGAPORE, March 3 Singapore's Tiger Airways Ltd
aims to sell or close its Indonesian joint venture
unless there are signs of it turning around this year, people
familiar with the matter said.
PT Mandala Airlines resumed flights in 2012 after financial
restructuring under which Tiger bought a one-third stake, raised
to 35.8 percent in September. Even so, Tiger lost nearly S$40
million ($31.6 million) in the venture in April-December.
Tiger and Indonesian private equity firm Saratoga, which
owns 51 percent of the venture, are now unwilling to make
further investment, said the people, who were not authorised to
speak publicly on the matter and so declined to be identified.
"The writing is on the wall," said one company source.
Last month, the venture now known as Tigerair Mandala
suspended nine routes or about 40 percent of its capacity in a
market where larger competitors such as Lion Air and Garuda
Indonesia are adding planes to more destinations in
the 17,000-island archipelago.
"The more it flies, the more it loses money as nearly every
route is below break-even," said one of the people, referring to
Tigerair Mandala. "Tiger is subscale in Indonesia. Either it
gets out or grows out of trouble."
A spokesman for Tigerair Mandala said both Tiger and
Saratoga are committed to supporting the company "for a long
period to ensure business sustainability."
Tiger Airways, about 40 percent owned by Singapore Airlines
Ltd, did not respond to queries from Reuters.
Tiger would be facing its second exit this year if it sells
or closes Tigerair Mandala, after agreeing in January to sell
its loss-incurring Philippine business to Cebu Air Inc
parent Cebu Pacific.
($1 = 1.2667 Singapore dollars)
(Editing by Rachel Armstrong and Christopher Cushing)