Tigerair

Tigerair Manala will cease operations from 1st Jul ’14, following recent unsuccessful efforts to sell the embattled airline to rivals. To re-highlight, just last week, Citilink and AirAsia announced that they were walking away from a potential acquisition from Tigerair Mandala, with both carriers highlighting that that acquiring Mandala would not significantly give them a competitive edge over rivals nor improve their network. Nevertheless, Tigerair guides that Indonesia remains an important market for the group, and will continue to maintain an active presence through Tigerair Singapore, Overall, the decision to pull out of Mandala will enable the loss-making Tigerair group to focus on its turnaround strategy, which includes fleet consolidation, strategic alliances and an asset-light growth model. In its recent 4QFY14 results, the carrier sank deeper into the red as net loss widened to $95.5m from $15.4m a year ago. This marks the budget carrier's third consecutive year of losses. On its prospects, Tigerair foresees a challenging outlook amid the over-supply of capacity in the region, and cautions that its yield and load factors remain under pressure. Tigerair currently trades at 1.85x P/B, against its profitable peers Cebu Air (1.67x P/B) and AirAsia (1.34x P/B).