Aviation News

January 30, 2012

Grounded Mandala Airlines to Resume Service Following Investment from Tiger Airways

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By: Matt Molnar
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Singapore budget airline Tiger Airways has bought a 33 percent stake in grounded Indonesian carrier Mandala Airlines, the companies announced on Monday. Financial details were not immediately disclosed.

Mandala Airlines Boeing 737-400 at Indonesia's Soekarno-Hatta International Airport

A Mandala Airlines Boeing 737-400 at Indonesia's Soekarno-Hatta International Airport. (Photo by Idban Secandri, via Flickr, CC BY-NC-SA.)

Following an announcement in September 2011, the Singapore-based airline said it has completed the transaction of 22,618,594 new Class C shares, representing approximately 33 percent of Mandala Airlines. With Indonesian investment company Saratoga Group holding a 51.3 percent stake, it makes Tiger Airways the second biggest shareholder.

Mandala Airlines suspended its operations in January 2011 due to massive debts, but the budget carrier has undergone financial restructuring and expects to resume flights in April of this year. Mandala’s Air Operator’s Certificate (AOC) is expected to be reactivated next month, after which flight sales will resume.

“We are pleased to have completed this transaction, and are excited about the re-launch of Mandala’s operations once its AOC has been reactivated,” said Chin Yau Seng, CEO of Tiger Airways. “Mandala is the first of Tiger Airways’ joint venture ‘Cubs’ and represents a significant step in our efforts to expand our ‘paw-print’ in this region.”

The restructured Mandala Airlines is expected to adopt a business model similar to that of Tiger Airways, and plans to offer low fare travel to international and domestic Indonesian destinations within a 5-hour flying radius. Tiger Airways said Mandala will operate Airbus A320 aircraft and will release details about initial routes and destinations soon.

Sandiaga Uno, founding partner of the Saratoga Group, welcomed the investment by Tiger Airways. “We are delighted by the successful completion of this investment with our valued partners,” he said. “We take great pride in helping to return Mandala, a well-loved Indonesian icon, to the skies of Indonesia.”

Mandala Airlines, based in Jakarta, was founded in April 1969 and served several international destinations in addition to nearly two dozen domestic destinations. Their fleet consists of eight Airbus aircraft, but the airline ordered 25 additional planes in 2007.