Tiger Air: announces the completion of its 33% invmt in PT Mandala Airlines of Indonesia. Says the next stage is to reactivate Mandala’s Air Operator’s Cerificate (AOC) which has been frozen since suspension of operations in Jan ’11. The AOC is expected to be reactivated in Feb ’12, after which flight sales will commence ahead of the resumption of flights in Apr ’12.
News is positive as it provides greater clarity on Tiger’s expansion plans in Indonesia, and build upon its existing hubs in Spore, Australia and the Philippines (via SE Air). A more extensive network and greater scale allows Tiger to compete more effectively against other budget carriers, ie. AirAsia, Cebu Air, which have also been growing aggressively in this region.
Technically, the stock appears to have bottomed out at $0.60, and has broken out of the downward trend channel. With the past negative news now behind (ie. suspension of Australian operations and pilot shortage issue), this forms a positive backdrop for the stock to recover. Although RSI and Stochastics are overbought, investors may consider positioning for the longer term. First resistance is at $0.80. Initial support at $0.70, followed by $0.65 (50day MA).
Tiger reports 3QFY11 results today after market.
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