Tigerair bounces off record low on Taiwan JV plan

Tiger Airways Holdings' shares jumped 3 per cent on Monday, off an all-time low hit last week, encouraged by the company's plan to form a joint-venture budget carrier in Taiwan. -- ST FILE PHOTO: JOYCE FANG
Tiger Airways Holdings' shares jumped 3 per cent on Monday, off an all-time low hit last week, encouraged by the company's plan to form a joint-venture budget carrier in Taiwan. -- ST FILE PHOTO: JOYCE FANG

SINGAPORE (Reuters) - Tiger Airways Holdings' shares jumped 3 per cent on Monday, off an all-time low hit last week, encouraged by the company's plan to form a joint-venture budget carrier in Taiwan.

Tigerair, in which Singapore Airlines owns about a third stake, said it would hold a 10 per cent stake in Tigerair Taiwan, the new joint venture with China Airlines, in a bid to tap the budget air travel market in North Asia.

Tigerair also signed an agreement with Indian budget airline SpiceJet to enhance connectivity between flights operated by both carriers, and formed a partnership with Scoot, a medium-to-long haul low-cost carrier owned by Singapore Airlines.

Tigerair's share price rose 3 per cent to $0.515, off an all-time low of $0.495, as the broader market edged lower. The share price has fallen 25 per cent so far this year as the carrier struggled with stiff competition.

"This is an encouraging move, but the question is whether they can really move the needle," said Timothy Ross, head of Asia-Pacific transport research at Credit Suisse in Singapore.

"They will take aircraft from Tiger's fleet that are currently under-utilised, which is positive for cash flow and return on investment. But obviously that begs the question why they have not been adequately employed."

In a separate announcement, Singapore Airlines' Scoot said the company planned to establish a new Bangkok-based low-cost carrier with Nok Airlines Public Co.