Tiger Air: the ash cloud from the Chile volcano has returned to Australian airspace, causing Virgin to suspend all Adelaide and Mildura flights and Tiger to cancel 8 flights btwn Sydney & Melbourne, and Melbourne & Adelaide.
The latest flight cancellations adds to Tiger’s list of woes, such as aircraft technical difficulties, pilot shortages and rising fuel costs, that caused the airline to miss earnings estimates for the recent FYMar11...
Expect Tiger Australia to be a drag on the Group. The unit contributed $279m, or 45% of Group revenue last yr, but made an operating loss of $9m (widening from the $0.6m loss in the previous yr).
Stock trades at 15.7x trailing P/E, vs closest peer AirAsia at 8.5x P/E.
Recent Street ratings are Neutral/Sell with TP ranging btwn $1.30-1.60.
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