Tigerair reduces losses but future lies in revamp
Tigerair Australia has narrowed its first-quarter losses as it begins to consider a rejig of its route network after Virgin Australia completed the purchase of a controlling stake.
In what is traditionally a weak period for travel, Tigerair Australia posted a loss of $S17 million ($14.6 million) for the three months to June, compared with $S21 million previously. Revenue rose by almost 70 per cent to $S71 million during the quarter, which was almost in line with growth in traffic volume.
A year ago, the airline was still operating under restricted services imposed by the air safety watchdog following its forced grounding due to safety concerns.
Yields - or returns from fares - rose 0.8 per cent during the latest quarter.
Following Virgin's purchase of a 60 per cent stake early this month, Tigerair has begun to shift its focus from routes dominated by business travel, such as Sydney-Melbourne, to those serving leisure destinations.
Tigerair Group chief executive Koay Peng Yen said talks had begun about changes to the Australian airline's route network, and it was in the interests of both shareholders to "make enhancements" as soon as possible. The Singaporean airline holds the remaining 40 per cent stake.
Tigerair Australia will take delivery of another Airbus A320 aircraft in the second half of this year, which will boost its fleet to 12 planes.
In a bid to resurrect its tarnished brand, the budget airline this month changed its name from Tiger Airways to Tigerair and ditched the leaping tiger logo.
Tigerair's new management team still faces a challenge in stemming its losses. The airline has now chalked up losses of more than $240 million since its Australian launch in 2007.
Jetstar has about 22 per cent of the domestic market, which dwarfs Tiger's share of about 4 per cent.
Meanwhile, the Qantas-backed Fiji Airways has posted an annual net profit of $F14 million ($8 million), up from $F11 million a year earlier. Qantas has a 46 per cent stake in the flag carrier, which recently changed its name from Air Pacific. The Fiji government owns the remaining 51 per cent.