Tiger Air

Tiger Air: 2QFYMar13 results. Net loss of $18.3m, narrowed vs the $49.9m loss yoy, underpinned by profits achieved by Tiger Singapore as compared to a loss in 2Q12, and reduced losses from Tiger Australia. Revenue rebounded 78.9% to $197m from the low base of $110m yoy, which coincided with the six-week suspension of Tiger Australia's operations. The budget carrier said the improvement was a result of increased capacity (+42.1%), stronger yield (+21.2%) and higher passenger load factor (+2.9 ppt to 82.9%). Tiger's Australian fleet was grounded in Jul ‘11 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. The airline said it will continue to focus on returning to profitability. Tiger Singapore will continue to grow capacity at a measured pace through flight frequency increases and this will in turn improve aircraft utilisation. Following the proposed divestment of a 60% stake in Tiger Australia to Virgin Australia, Tiger Australia will be able to leverage the strengths of both shareholders in network planning, operational management, and procurement. The partnership also aims to bring about a more competitive Tiger Australia, and to deploy more low cost capacity and attractive offerings to customers. Completion of the share sale is subject to certain conditions precedent, including appropriate regulatory approvals in Australia by the Australian Competition and Consumer Commission and Foreign Investment Review Board. The shares are halted, likely related to the sale of Tiger Australia to Virgin Australia (see next post). At last close of $0.735, Tiger Air trades at 2.8x P/B.