Mumbai: Airline sector is witnessing some interesting developments off-late. Even as AirAsia is yet to start its operations and Jet Airways is yet to formalise its relationship with Etihad, SpiceJet has signed an inter-line agreement with Singapore based low fare airline Tiger Airways Singapore Pte Ltd.
There is nothing much in the deal that deserves a 12 per cent rise in the stock price that was seen when the news hit the market. Inter-line agreement is nothing more than SpiceJet getting rights to sell tickets of Tiger Airways along with its own tickets and vice-versa. It will help passengers flying abroad to plan their trip better, taking services of two low cost airlines to complete their journey. The impact on SpiceJet's financials is unlikely to be significant, but the underlying message in the deal is.
Tiger Airways is AirAsia's main rival in South East Asia. By entering into a relationship with SpiceJet, it is bringing the dog-fight to Indian skies. Though Tiger Airways is not pumping in money at this stage, probably an inter-line agreement could be a precursor and a probation period before a formal tie-up is announced.SpiceJet will be tested for its operations, flight schedules and in-flight services as Tiger Airways passengers might be using its services to connect with India.
Read News In full 17/12/13 Shishir Asthana/Business Standard
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