Tigerair turnaround plan taking off

Tigerair has added frequency to its flights to Ipoh, Malaysia, and is also flying to Quanzhou and Lijiang in China and, soon, to Lucknow in India. It plans to work closely with the SIA group in future.
Tigerair has added frequency to its flights to Ipoh, Malaysia, and is also flying to Quanzhou and Lijiang in China and, soon, to Lucknow in India. It plans to work closely with the SIA group in future.PHOTO: TIGERAIR

Budget carrier reduced losses drastically, improved bottom line in second quarter

Budget carrier Tigerair, which has embarked on an aggressive turnaround plan, has not yet stemmed its losses, but the cash bleed has been minimised.

Between July and September, the Singapore Airlines (SIA) subsidiary lost $12.8 million, far less than the $182.4 million loss incurred during the same three months last year.

The absence of losses related to the divestment of a 40 per cent stake in Tigerair Australia recorded a year ago. Lower fuel prices also contributed to the improved bottom line.

Group revenue for the second quarter was $167.9 million, up by 12.8 per cent from a year earlier, while yields improved by 8.2 per cent. Total spending grew by a smaller 2.4 per cent year-on-year to $178.3 million.

Quarterly loss per share was 0.51 cent, from 16.39 cents a year earlier. Net asset value per share was 8.37 cents as of Sept 30, from 8.63 cents on March 31.

The latest numbers translate into a half-year net loss of $14.4 million from a $247.6 million loss a year ago.

  • AT A GLANCE

    NET LOSS

    $12.8 million

    REVENUE

    $167.9 million (+12.8 %)

Speaking to reporters and analysts yesterday after the numbers were disclosed, Tigerair's chief executive officer, Mr Lee Lik Hsin, said: "We are encouraged by the narrowing of losses in a seasonally weak second quarter. We will work hard to deliver further improvements for the months ahead."

Frequency has been added to flights to Ipoh, Malaysia, and the airline has started services to Quanzhou in China's Fujian province.

Flights to Lijiang in Yunnan, which were discontinued last year, will be resurrected, and Tigerair will also start flying to the Indian city of Lucknow in December.

To reach out to the corporate market, it has partnered Amex to introduce a new payment mode.

And travellers flying out of Hong Kong can now use check-in services provided at seven ferry terminals.

Looking ahead, there are more plans to work closely with the SIA group, comprising the parent carrier, regional subsidiary SilkAir and long-haul budget arm Scoot.

This will allow for convenient transfers for connecting passengers and also provide more destination and flight options to customers, the airline said.

Details of a partnership with Cebu Pacific in the Philippines are also being worked on, to allow the two carriers to coordinate sales and flight schedules, Mr Lee said.

Even as the demand for air travel continues to grow, competition is keen among airlines, said industry analysts. This should ensure that fares stay attractive, especially for those willing to travel during the off- peak seasons, they added.

A version of this article appeared in the print edition of The Straits Times on October 24, 2015, with the headline 'Tigerair turnaround plan taking off'. Print Edition | Subscribe