Tiger Air: announced that Tiger Australia is allowed to fly 32 sectors daily (up from 22) with immediate effect, indicating that the unit is making good turnaround progress. Recall, prior to the Australian flight suspensions, Tiger was flying up to 60 sectors a day.
Still, Citi says it is too early to cheer, as it is unsure the extent that Tiger Australia can raise load factors and yields beyond current levels which are only sufficient to cover variable costs. Notes also that Tiger’s fleet remains underutilized with only 6 out of 10 aircraft in Australia actively deployed in the new flying program.
The house maintains Sell, reduces TP to $0.55 from $0.60, on the back of disappointing 2QFY12 results and a possible slow earnings turnaround. Says Tiger may have passed the worst moment of its recent history, but many challenges lie ahead.
DBSV keeps at Hold with TP $0.71, says visibility remains poor.
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