Tiger Australia cuts its losses

Tiger Australia has continued to narrow its losses due to stronger returns from fares and is operating without restrictions from air-safety authorities.

Two months before Virgin Australia is set to take control, the budget airline has posted an operating loss of $S15 million ($12 million) for the three months to March - an improvement on an $S18 million loss in the same quarter a year earlier.

Yields - or returns from fares - rose 2.5 per cent for the quarter.

Revenue rose 82 per cent to $S71 million but higher operating costs from increased flying resulted in the airline continuing to bleed red ink.

Air-safety regulators removed the final restrictions on Tiger's flying operations late last year. In 2011, the Civil Aviation Safety Authority grounded the airline for six weeks due to safety concerns.

The airline's Singaporean parent, Tiger Airways Holdings, posted a bottom-line loss of $S15 million for the quarter, compared with $S16 million in the red previously.

The parent said Tiger Australia was now "better positioned to tap opportunities for further expansion in terms of network and market reach".

Virgin received approval from the competition regulator last month to buy a 60 per cent stake in Tiger Australia, but does not expect to complete the deal until mid-July.

Australia's second-largest airline still faces a challenge in stemming Tiger's losses, which have been running at about $60 million a year.

The losses will also be a drag on Virgin once it takes control. Matt O'Sullivan