Tiger Airways slow to heal

IT had not been a good year for budget carrier Tiger Airways as it reported a fiscal year loss of S$104.3 million (US$81.3 million) for 2011/12 compared to a profit of S$39.9 million the previous year.

Added to the woes of high jet fuel costs that almost every airline is griping about, Tiger suffered from a period of flight suspension by the Australian authorities for safety infringement. Passengers carried in Q4 (Jan-Mar) was down 25 per cent, but if you look at Australia alone, it plunged 56 per cent.

If it is any indication of a recovery on the horizon, Q4 loss of S$16.4 million is a tad better than Q3 loss of S$17.4 million, both quarters reportedly levelling off the loss. Analysts are optimistic that things should look up for the beleaguered carrier, which is 32.8 per cent owned by Singapore Airlines (SIA),

Three factors may favour its recovery. First, services in Australia resume in July. Second, start-up joint operations with Indonesian carrier Mandala Airlines and the Philippines’ SEAir will also help utilize excess capacity. And, third, possible boost from feeder traffic when SIA’s second budget subsidiary Scoot commences operations to Sydney in July.

But is the picture all that rosy? Tiger will have to work hard to regain lost customers against main rivals Qantas Domestic and Virgin Australia. Mandala Airlines and SEAir have yet to be tested. And Scoot may not fill the seats of Tiger as expected if it carries mainly end-to-end traffic – the same that could be said of feeder traffic from parent SIA, which, incidentally, has entered into an arrangement with Virgin Australia to connect traffic on each other’s flights.

All that, too, is subject to a bigger IF as the airline industry continues to languish in global economic uncertainties and faces an increasingly volatile fuel price.


About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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