Tiger Airways Reports Profit; Launches Promotion

Tiger Airways has reported an operating profit for the year ended 31 March 2010 of $28 million, a $75.5 million turnaround as compared to the year ended 31 March 2009. Net profit after tax for the year was $28.2 million, a $79 million turnaround compared to the previous financial year.

Underlying operating profit, which excludes fuel hedging losses of $21.7 million and IPO related expenses, was $49.7 million, a $79.9 million turnaround from the previous financial year. The strong annual result was supported by revenue growth of 28.6% from $378 million to $486.2 million as a result of a 53.8% increase in passenger numbers. Growth in passenger volume outstripped seat capacity growth of 43.5%, leading to a 5.7 percentage point improvement in load factor to 85.1%.

Unit cost as measured by Cost per Available Seat Kilometre (CASK) was 11.4% lower than the previous year, and CASK excluding fuel was maintained at the previous year’s level despite a 15.1% reduction in sector length.

To celebrate the strong results, Tiger Airways is offering 600,000 seats on selected international routes at a discount of 75% off base fares. For travel between 1 July 2010 to 26 March 2011, these seats are on sale from now till 19 May 2010 or until stocks sell out.

 “No matter how you cut the numbers, these are great results for Tiger Airways. Our Singapore cub recorded its third year of operating profit, and our Australian cub has recorded a breakeven operating result in its second full year of operation, a fantastic achievement. Following the breakeven result from Tiger Australia, we have recognised 50% of the Australian deferred tax asset. The balance remains available for offset against future years’ profits,” said Tony Davis, President and Group CEO. “We have clearly succeeded with our pure low cost model – growing profits by relentlessly reducing costs and offering the lowest fares possible. Controllable costs per seat reduced 15.1% and average passenger fares reduced 22.2% compared to the previous year.”

The ancillary services offering will also be enhanced when cargo services, currently on trial, are implemented on all flights by Tiger Airways Singapore.

The airline has 7 Airbus A320 aircraft scheduled for delivery during the financial year ending 31 March 2011. These aircraft will be allocated to its subsidiary airline businesses on a profit maximisation basis.

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