Singapore budget carrier Tigerair has confirmed that it will give up its 40 per cent stake in its Philippine affiliate. The deal is part of a larger strategic alliance with Philippine low-cost giant Cebu Pacific, Tigerair said in Wednesday morning announcement to the Singapore Exchange.

Under the agreement, the Singapore carrier will sell its stake in Tigerair Philippines to Cebu Pacific. But it will maintain a key presence in the Philippine market by collaborating commercially and operationally with Cebu Pacific on international and domestic air routes from the Philippines.

It is also the intention to jointly market routes and provide convenient transfers for travellers. Subject to regulatory approval, both carriers will jointly operate common routes between Singapore and the Philippines.

Group chief executive officer of Tigerair Mr Koay Peng Yen said: "This partnership with Cebu Pacific is consistent with our asset-light strategy and builds upon our other alliances. We also look forward to achieving greater cost savings from the coordinated operations while providing more travel options and greater convenience for our customers."

Tigerair entered the Philippine market in 2006 when it announced a commercial tie-up with what was then called SEAir. Tigerair went on to take a 40 per cent stake in the carrier which was later renamed Tigerair Philippines. The remaining 60 per cent stake is owned by Filipino shareholders led by Tomas B. Lopez. This will also be bought over by Cebu Pacific.