Tiger Airways records profit of $28mln

Airline achieved a $79.0 million turnaround in net profit compared to the previous financial year.

Tiger Airways Holdings Limited announced strong growth in profitability for the year ended 31 March 2010, according to a Tiger Airways report.

Operating profit for the year ended 31 March 2010 was $28.0 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 $79.0 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 $378.0 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.

Tony Davis, President and Group CEO, said: “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 recognized 50% of the Australian deferred tax asset. The balance remains available for offset against future years’ profits.

“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.

“Operating the right business model in the right markets, we are well positioned to take advantage of the growth opportunities in the region. In November, we will increase our pawprints in India with new services to Trichy and Trivandrum in Southern India, as well as increase our frequencies on Singapore - Chennai. In Australia, we will re-establish services between Melbourne (Tullamarine) and Darwin from June, and will introduce Melbourne (Tullamarine) to Cairns services from September. Further, we will commence operations from our third base in Australia at Avalon Airport later this year. Avalon provides significant cost savings which will be passed on to our customers in the form of even lower fares,” said Tony Davis.

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

The improving economic environment in the Asia Pacific region and the maturity of its businesses will provide the support for continued expansion of Tiger Airways existing operations and to investigate the possibility of establishing new “cubs” in the region.

To support the airline’s growth plans, it has procured 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 maximization basis. In the near term, forward bookings continue to be firm and in line with the recent trend.

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 last at www.tigerairways.com.