The Context

  • Prior to our investment, Asia region was set for significant GDP & dramatic aviation growth (usually 2-3 times GDP growth rate)
  • Asia had a low LCC penetration level and was likely to enjoy regulatory liberalisation of route rights
  • Singapore Airlines (SIA) was keen to participate in new LCC segment of the market and to collaborate with LCC expertise
  • A partnership was developed between Irelandia Aviation, SIA, Indigo Partners and Temasek to establish an arm’s length LCC
  • Start-up was achieved in September 2004

What was achieved

  • Tiger implemented ultra LCC model
  • Pioneered development of ancillary revenues in the SE Asian market
  • Development of effective mid-range network strategy (+/-3 hours) to work with restrictions on market access prior to deregulation
  • By the time of IPO in January 2010, Tiger had:
    • Businesses in Singapore and Australia; it operated 35 routes to 11 countries
    • Grown to 17 aircraft and 3m passengers
    • Achieved profitability by year 3 of full operation (2008)
    • Successfully operated from innovative low cost terminal ('Budget Terminal') in Singapore with significant savings
    • Established a strong platform for growth
  • IPO valued Tiger at US$560m on Singapore exchange in January 2010

Key Lessons

  • Partnership with existing airline can work well where Irelandia brings LCC expertise
  • LCC should be at arm's length from major airline partner operations to ensure focus and LCC model
  • Consumers are attracted by low fares and efficient operations - even in traditional markets

Irelandia Position

  • Irelandia Board membership led by Declan Ryan
  • Support of management between Board meetings on range of critical items
  • Irelandia investment in 2004; IPO in 2010
  • Achieved over 28x return