Tiger Air

Tiger Air: poor 2QFYMar11 results, below already weak Street estimates.
The budget carrier reported a net loss of $49.9m, vs a $20.6m loss in the previous quarter, and down from a net profit of $14.1m a year earlier. Street expectations were for a $33.5m net loss.

This was mainly due to the losses generated by Tiger Australia as a result of the(suspension imposed by Australia's Civil Aviation Safety Authority), and the group's exposure to high and volatile jet fuel prices.
Recall, Tiger’s Australian fleet was grounded Jul 2 for nearly six weeks after two flights flown by the same pilot approached airports in Melbourne below a safe altitude, stoking earlier concerns from Australian aviation regulators about pilot-training and maintenance procedures. Tiger has estimated the grounding to have cost it ~$2m/wk.

FX losses due to the weakening of the AUD against the SGD further exacerbated Tiger's 2Q losses. There was also an unexpected loss on disposal of aircraft of $4.3m.

On outlook, mgt said it expects to record a “significant” net loss for the financial year. Nevertheless, load factor is starting to improve again from the lows, and Tiger Australia has broadly covered its variable costs post-suspension.

Tiger also reported Oct operating data. The airline carried 408k passengers, -10% yoy, +3% qoq. Load factor was 77%, -10ppt yoy, -1ppt qoq. Tiger Australia is now permitted to operate 22 daily sectors, up from the 18 sectors that it was allowed to fly when the Australian unit just resumed operations.

The stock trades at 2.8x P/B, vs its more profitable and larger peer AirAsia at 2.7x P/B.
Goldman maintains Neutral rating, but cuts TP to $0.76 from $0.82.