Tiger Airways

Tiger Airways: CIMB is NETURAL (from underperform), with TP of $0.66. On its recent results released, Core net loss narrowed from $88m in FY12 to $45m in FY13, as it partially recovered from the devastating impact of its mid-2011 Australian suspension. Tiger Singapore recovered from operating losses of $16m in FY12 to an operating profit of $57m in FY13, with its earlier loss caused by excessive capacity deployment in Singapore after its Australian suspension. CIMB believes the worst for Tiger is likely over, with: (1) its Singapore operations likely to improve further on robust demand; (2) Mandala’s losses expected to narrow with increased synergistic flying into Singapore; (3) the sale of 60% of Tiger Australia almost assured; (4) the completion of its rights issue and capital raising. However, CIMB expect Mandala, SEAir and Tiger Australia to remain loss-making over the next three years, and be a drain on Tiger as it will need to pump in working capital.