Tigerair losses widen

Struggling Asian low-cost carrier Tigerair has posted another quarterly loss.

The Singapore-based airline recorded an operating loss of SG$16.4 million (US$13.2m) for the three months ending 30 June 2014 – significantly worse than the SG$6.2m loss it posted in the same period last year.

Revenues declined 28.4% to SG$169m, mainly due to the removal of Tigerair Australia from the groups’ results, following the unit’s sale to Virgin Australia. But the accompanying 23.5% reduction in costs failed to fully offset the lost revenue. The group also attributed SG$14.6m in costs to the closure of its Indonesian unit, Tigerair Mandala.

But despite this, Tigerair’s new group CEO, Lee Lik Hsin, remained positive.

“Despite the competitive operating conditions faced by Tigerair Singapore, our first quarter results showed a slight improvement over the last quarter,” Lee said.

“The financial performance was weighed down by share of loss from Mandala, and shutdown costs in relation to the cessation of operations in Indonesia. With the cessation, the group will no longer be exposed to loss-making Mandala.”

Tigerair Singapore saw its performance slide in the quarter, with operating losses widening from SG$5.9m in Q1 2013 to SG$19.8m in Q1 2014, although the company noted that this result marked an improvement from the SG$29.4m loss recorded in the previous quarter.

Moving forward, Tigerair said it would continue to focus on “cost discipline, rationalising its network and improving operational efficiency”.

“Tigerair Singapore continues to operate in a challenging environment due to persistent oversupply of capacity in the region,” the company said.

“The cessation of operations by Mandala has led to the return of four aircraft to the group, even as plans for the grounding of eight other aircraft in FY15 are being executed. The group will seek to place out the surplus aircraft,” it added.