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Tiger trims losses, but profits still far away

written by australianaviation.com.au | July 30, 2012

Tiger Airways says it will be back at pre-grounding flight levels by October.

Tiger Airways has trimmed its Australian losses as it returns to full operations, but says the intensifying capacity war between Qantas and Virgin Australia means it will take longer than expected for Tiger to turn a profit.

Tiger reported an operating loss in Australia of $16 million for the three months ending in June, improving on losses of about $17.6 million in the first quarter. The carrier said quarter-to-quarter yields rose by 11 per cent.

But Tiger CEO Andrew David said yields were expected to fall in the second half of the year as substantial capacity increases by Qantas, Jetstar and Virgin Australia force airlines to cut fares.

“We may see a delay in profitability, but our competitors are going to feel it as well,” Mr David said.

Tiger has gradually rebuilt its operations since it returned to the skies after a six week CASA-imposed grounding over safety issues last year. By October the carrier plans to operate the same number of daily flight sectors – 64 – as it did prior to the grounding, and Tiger says it has hired 100 cabin crew and 30 pilots in recent months, bringing its Australia workforce to nearly 500. The carrier has also continued to post consistently improved on-time numbers, beating all other Australian carriers in June.


Still, the second-quarter losses bring Tiger’s total losses in Australia to $190 million since its launched operations in 2007. Tiger Australia’s losses continue to drag down the performance of its Singaporean parent company, which posted a fifth straight quarterly loss despite profitable operations in Singapore.

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