SINGAPORE - Tiger Airways Holdings will sublease 12 of its aircraft to Indian budget carrier InterGlobe Aviation in a move to reduce excess capacity and cut costs.

The planes will be sublet at a discount to their original lease rates for between three to four years. This is expected to save the firm about $162 million, said Tigerair on Thursday.

Tigerair said most of the airplanes were previously operated by Tigerair Philippines - which has been sold - and the now-defunct Tigerair Mandala.

"The sublease agreement resolves our excess capacity issue and puts us in a better position to focus on our Singapore operations," said Mr Lee Lik Hsin, group chief executive at Tigerair.

The planes will be delivered to InterGlobe Aviation over a six-month period.

Of the 12 aircraft, four will be gradually reintroduced to Tigerair's service network at the end of the leasing period.

As a result, the firm has made a one-time accounting provision of $93 million for the loss of subletting income from the four planes.