People sit at a viewing gallery overlooking a Singapore Airlines plane sitting next to SilkAir and Scoot planes at Changi Airport in Singapore on May 7, 2014. (Reuters)
Singapore Airlines (SIA) said today it is in talks to buy a stake in South Korean budget carrier Jeju Air, a deal that would expand its low-cost portfolio.
"Singapore Airlines wishes to confirm that discussions have taken place on a possible equity investment in the airline," it said in a filing with the Singapore Exchange.
"These discussions may not result in a transaction. Singapore Airlines will make further public announcements as necessary."
South Korea's Maeil Business newspaper reported today that SIA is in talks with conglomerate Aekyung Group to acquire about 20 per cent of Jeju Air.
It said both parties began the talks at the end of last year and were at the "final stage of negotiation for the acquisition price".
The report added that Aekyung Group currently holds 86.23 per cent of Jeju Air.
SIA, Asia's third largest carrier by market value according to Bloomberg News, is seeking other sources of growth as it faces tougher competition from Middle Eastern and Asian carriers, as well as from Southeast Asian budget airlines.
SIA is a majority stake-holder in Singapore-based low-cost carrier Tiger Airways and has a wholly owned long-haul budget subsidiary called Scoot.
The airline said last month its third-quarter net profit more than quadrupled year-on-year to Sg$202.6 million ($146 million) boosted by one-off gains.