Singapore Airlines announces Tigerair takeover bid

"Tiger Airways' development potential is limited without deeper integration with the SIA Group to build a strong foundation for growth over the long term, " said SIA CEO, Goh Choon Phong, in a statement.

SIA now owns 55.8 per cent of Tigerair and the "voluntary conditional general offer" is for the shares it does not already own valued at around 453 million Singapore dollars (USD 322 million). The offer values Tiger at SGD1.02bn (£477m, €668m, $718m), meaning Singapore Airlines will have to shell out SGD453m for the rest of Tiger shares.

In hopes of helping Tiger Airway's financials past year, Singapore Airlines increased the budget carrier's stake, but in the process it ended partnerships in Indonesia, the Philippines and Australia.

Yesterday, SIA had announced that its second-quarter net profit had more than doubled from the corresponding period in the previous year, largely due to an absence of share of losses from associated companies with Tiger Airways becoming a subsidiary, as well as higher dividends from long-term investments.

"Uncertainty in economic conditions persists, exacerbated by concerns about China's slowing economy which have led to weakening emerging market currencies and volatility in stock markets", SIA said.

Passenger yield, or money earned from carrying customers per kilometre, fell to 10.4 Singapore cents from 10.9 Singapore cents as more capacity was added, SIA said. The SIA Group also recently announced that Scoot will take over from Jan-2016 one of two daily Singapore-Guangzhou flights operated by the group's short haul LCC subsidiary Tigerair and from May-2016 the three weekly flights to Jeddah operated by SIA mainline.

Average jet fuel prices were 41.1 percent lower than a year ago, said SIA.

That allowed the company to report a net profit of SGD$305 million, up SGD$179 million from a year before.

"The outlook for both passenger and cargo traffic is cautious". Tiger Airways, which saw a successful listing at SGD1.50 in January 2010, witnessed its share price slide to a low of SGD0.22 last October.