Tigerair reduces losses but future lies in revamp
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.
Frequently Asked Questions about this Article…
Tigerair Australia narrowed its first-quarter loss to S$17 million (about A$14.6 million) for the three months to June, down from S$21 million a year earlier. Revenue rose by almost 70% to S$71 million during the quarter, and yields (returns from fares) increased by 0.8%.
After Virgin Australia bought a 60% stake, Tigerair has started talks about changing its Australian route network. Management says they’re shifting focus away from business-heavy routes like Sydney–Melbourne toward more leisure destinations, and shareholders want enhancements made as soon as possible.
Yes. Tigerair Australia will take delivery of another Airbus A320 in the second half of the year, which will increase its fleet to 12 aircraft, providing more capacity as it adjusts routes and service.
Yes. In an effort to resurrect its tarnished brand, the budget airline changed its name from Tiger Airways to Tigerair this month and removed the leaping tiger logo as part of a rebranding effort.
Tigerair has recorded cumulative losses of more than $240 million since launching in Australia in 2007. Its domestic market share is around 4%, compared with about 22% for competitor Jetstar.
The new management faces the ongoing challenge of stemming losses after years of deficits. Key issues for investors to monitor include success in reworking the route network, fare yields, fleet utilisation with the incoming A320, and whether the rebrand improves customer confidence.
Yes. The article notes Jetstar holds roughly 22% of the domestic market versus Tigerair’s ~4%. It also reports Fiji Airways (formerly Air Pacific) posted an annual net profit of F$14 million (about A$8 million), up from F$11 million a year earlier; Qantas owns a 46% stake in Fiji Airways and the Fiji government owns 51%.
Yes. Revenue for the quarter rose by nearly 70%, largely matching traffic growth, and yields ticked up 0.8%. While the quarter falls in a traditionally weak travel period, those revenue and yield improvements are positive signals investors may want to track alongside network changes and cost control.
Call 1300 880 160
Start a chat
Schedule a call
