Tigerair Q2 operating loss widens to S$12.8 million

Singapore
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Tigerair’s operating loss widened to Singapore dollars (S$) 12.8 million ($10.3 million) in its 2014 fiscal second quarter ending 30 September, compared with S$11.5 million a year ago.

The low-cost carrier’s second quarter revenue declined 17% to S$164 million owing to the partial disposal of Tigerair Australia during the quarter, said the company in a Singapore stock exchange statement.

Tigerair Australia ceased to be a unit on 8 July 2013 when Virgin Australia completed the acquisition of a 60% stake in the unit, and its revenues and expenses are no longer included in Tigerair’s results.

The Tigerair disposal, however, helped boost Tigerair’s net profit to S$23.8 million in the three months to 30 September, compared with a net loss of S$18.3 million a year ago.

“The Group posted a net profit for the second quarter, after taking into account the gain on partial disposal of Tigerair Australia,” says group chief executive Koay Peng Yen.

“Our bottom line was nevertheless impacted by higher airport and handling charges following our relocation from Changi Airport’s Budget Terminal to Terminal 2, and losses in the associate airlines in Australia, Indonesia and the Philippines.”

The carrier’s consolidated income statement shows that despite the exclusion of Tigerair Australia from its second quarter results, airport handling charges rose by S$1 million to $22.6 million compared with a year earlier.

The carrier plans to receive three additional Airbus A320 aircraft before the end of its 2014 fiscal year, bringing its fleet to 26 aircraft. Tigerair warns that “it will take time for the additional capacity to be absorbed into the market,” which will pressure its passenger load factor and yield.