Singapore-based Tigerair is to have a new CEO after reporting a net loss of SG$223m (A$191m) in the year to March 31, a five-fold increase over the previous corresponding period.
As a consequence, the budget airline, which is 40 per cent owned by Singapore Airlines, has moved to replace CEO Koay Peng Yen – who has only been in the job since mid-2012 – with long-time Singapore Airlines executive Lee Lik Hsin from May 12.
Even though Tigerair has operated as a separate entity to its major shareholder, Singapore Airlines is reportedly looking to better align Tigerair with its other brands and to push for it to expand further into the Asian market.
“The [Singapore Airlines] group will align all these airlines so as to have a coherent strategy going forward,” aerospace consultant Sagar Ashok told Reuters. “So each airline benefits from the other airline and they really don’t compete on routes, have flight schedules which go hand in hand with the other airlines and things like that. They’ll try to see where Tiger fits into all this and make better sense of what is happening and how different they can go forward in that particular segment.”
CAPA Centre for Aviation reports Tigerair will be restructured as it seeks to turn around the losses, and says the Singapore market currently has excess capacity resulting in lower yields and load factors. That same excess capacity has also seen Qantas halt growth at its Singapore-based Jetstar Asia subsidiary of Jetstar.
Local franchise Tigerair Australia, which is majority-owned and controlled by Virgin Australia and largely operates autonomously from Singapore-based Tigerair, also continues to be unprofitable, with a loss of SG$5.4m (A$4.62m) attributed to it in the quarter, taking its losses for the year to March 31 to about SG$14m (A$12m).
CAPA says Tigerair Australia is on a “growth path” after a period which saw it grounded and then partnered with Virgin Australia, but added that “challenging market conditions in Australia” will continue to hamper those efforts.