Budget airline SpiceJet has announced a three-year interline agreement with Singapore-based Tigerair to enhance connectivity between flights operated by both carriers.
Starting from January 6, 2014, customers travelling on SpiceJet’s domestic network from 14 Indian cities can enjoy seamless connection through Hyderabad airport onto Tigerair’s Singapore-bound flights, while Tigerair customers from Singapore will get access to SpiceJet’s domestic network starting from January 12.
According to reports, SpiceJet has been in talks with different foreign carriers for an equity participation. The government last year allowed foreign carreirs to invest maximum 49% into Indian airlines. However, the deal between the budget carrier and Tirgerair does not involve any equity participation, the airline official clarified at a press conference held at Hyderabad on Monday.
Experts, however, believe that equity infusion could be on cards, going ahead.
“It makes sense for the two airlines to consider a stake sale. It may happen in the next 6-8 months, by the time there will be a new government and foreign players will be more confident in investing in India,” said an industry expert.
The deal is expected to benefit SpiceJet, which reported a record loss of `559 crore in the second quarter of this fiscal. “Such initiatives are always welcome and beneficial for the passengers.
When profits on domestic operations are under pressure, Tigerair’s experience and marketing will help SpiceJet, and Tigerair will be able to tap the Indian market through SpiceJet,” said Amrit Pandurangi, senior director, Deloitte in India.
“This partnership will hugely benefit travellers from India and Singapore,” SpiceJet’s COO Sanjiv Kapoor, said.