SINGAPORE - Tigerair Mandala will cease operations on July 1.

In an announcement on Wednesday, Singapore budget carrier Tigerair which owns 36 per cent of the Indonesian carrier said the decision was made amid tough operating conditions.

After exploring various options, Mandala's shareholders including the Saratoga Group and PT Cardig International decided the airline would not be able to sustain its operations.

"As a result, they have decided to cease funding the airline" Tigerair said.

Despite the pullout, "Indonesia remains an important market for us, and we will continue to maintain an active presence through Tigerair Singapore", said Tigerair's group chief executive officer, Lee Lik Hsin.

Mandala's exit will enable Tigerair to focus on its turnaround strategy, which includes fleet consolidation, strategic alliances and an asset-light growth model, the carrier said.

Tiger Airways Holdings had acquired a 33 per cent stake in Mandala in January 2012 and increased it to 35.8 per cent in September 2013 through its wholly owned subsidiary, Roar Aviation.

Mandala will continue to operate its scheduled services until its last Hong Kong-Denpasar flight RI545 on July 1.

The airline will arrange for alternative flights, where possible, for customers with bookings after the last flight, or provide a refund.