Tiger Air

Tiger Air: Australian Competition regulator stated that Virgin-Tiger Air deal poses antitrust risks, as Virgin and Tiger Air are both ranked 2nd and 3rd ranks in Australia's domestic aviation market. This will reduce the number of airline groups within Australia from 3 to 2 (excluding regional airlines). However, ACCC has stated that they are considering- 1) if a significant increase in capacity would take place, this would also diminish the prospect of any increase in co-ordinated conduct in the market; 2) Tiger Australia's financial position and the likely size and strength of the airline if Virgin was allowed to buy it; 3) if Tiger Australia would exit the market in the absence of the proposed acquisition Tiger Air's shareholders has already approve of Virgin's A$35m offer for a 60% stake in the Company's Australian unit on 1 Feb 2013, and Virgin and Tiger both planned to expand Tiger's Australian fleet from 11 to 35 aircraft with the next 5 years. A final ruling will be on 14 Mar 2013. In the recent earnings released 24 Jan 2013, Tiger Airways announced a profit for the quarter after 6-consecutive quarters of losses. The turnaround for the Group was largely attributed to the stellar performance by Tiger Singapore during the quarter as Tiger Australia continued to suffer yield deterioration from intense competition. Analysts at UBS AG and Merrill Lynch expect yields, a measure of ticket prices, to have fallen by about 1 percent in the six months through December as Virgin, Qantas and Tiger add capacity in a fight for market share. OCBC maintains BUY and raise their TP to $0.86.