Troubled Tiger Air loses US$17 million in Q1

Tiger suffered its first quarterly loss since the airline went public in January last year.

In the three months ended June 30, the group which operates two carriers — Tiger Airways Singapore and Tiger Airways Australia — posted a net loss of SG$20.6 million (US$17 million), reversing a SG$1.9 million profit in the same quarter last year.

The poor performance was the result of high fuel prices and adverse weather conditions during the quarter, the company said.

Australian domestic services were significantly affected by volcanic ash from Chile's Puyehue-Cordon Caulle volcano.

Between April and June, Tiger Airways Australia recorded an operating loss of SG$23.2 million while the Singapore airline posted an operating profit of SG$7.5 million.

At the group level, overall revenue increased by 23.2 percent to SG$178.8 million but expenses grew faster; by 32.2 percent to almost SG$191 million.

How Tiger fares for the rest of the current financial year which ends March 31, 2012, will depend very much on how fast it can resume operations in Australia, said group chief executive officer Chin Yau Seng in a media teleconference after the results were released.

Tiger Airways Australia has been grounded since July 2 after the Australian Civil Aviation Safety Authority (Casa) suspended its operations over safety concerns.

When it clipped the airline's wings, Casa said it would seek approval from the federal court to do so. The flying ban would be imposed until then.

The court hearing has since been adjourned four times and is now scheduled for today.

Chin declined to comment on media reports out of Australia yesterday that the suspension could drag on for a few more weeks.

While he acknowledged that the mess Down Under, which is costing the airline about SG$2 million a week, would “significantly” hurt the group's bottom line, it was too early to say if it would push Tiger Airways into a full-year loss.

If it did, it would be the airline's first loss after five profit-making years. Despite the problems in Australia, Chin reiterated that Tiger remains committed to its business there.

He said: “This is a setback and a major setback. But we are committed to our Australian business and we see promise in the market.”

As and when Tiger Australia resumes operations, the airline will spare no efforts to rebuild its image and business, he said.

The company will also continue to focus on growing its Singapore operations and expanding its paw print in Asia.

For the three months to June 30, the group reported a loss per share of 3.8 cents, reversing earnings per share of 0.4 cent a year ago.

Net asset value per share fell to 31 cents at June 30, from 36 cents at March 31.

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