Tiger Airways third quarter profit up 85.3% to $30.2mn

The airline attributed profit growth on improvement in revenue and strict cost management across all business units.

Tiger Airways Holdings Limited (“the Company”) on Friday announced its results for the quarter ended 31 December 2010, the third quarter of the FY2010/11 financial year.

Profit before tax for the quarter ended 31 December 2010 was $30.2 million, an 85.3% increase over the $16.3 million profit recorded for the same quarter in the prior year. The Group recorded an 18% profit before tax margin for the quarter.

Revenue growth of 22.2% from $139.5 million to $170.4 million was ahead of both passenger and seat capacity growth of 13.4% and 13.0% respectively. Cost per Available Seat Kilometre (CASK) excluding fuel and foreign exchange difference reduced 3.2%. The Group load factor was 88.0% for the quarter.

Profit before tax for the 9 months ended 31 December 2010 was $46.8 million, an increase of 559% over the $7.1 million profit recorded in the 9 months to 31 December 2009.

Tony Davis, President and Group CEO, said: “Achieving an 18% profit before tax margin in the third quarter demonstrates our focus on delivering a profitable and sustainable expansion of our business. By managing to generate revenue growth ahead of seat capacity growth whilst keeping a tight control of costs shows that we have right formula to create shareholder returns. Ancillary revenue growth of 20% on a per passenger basis reflects our team’s ongoing innovative ambitions. During the quarter, we launched Stripes, our membership program providing members with priority access to promotions for an annual membership fee. We will continue to look at ways to generate further growth in ancillary income going forward."

"From our Singapore base, new services were launched to Trichy and Trivandrum in India and to Manila during the quarter, whilst in Australia we rolled-out our third domestic base at Avalon Airport. In December we established our Airline Partner Programme with South East Asian Airlines (SEAir) based out of Manila (Clark), which will provide significant operating cost savings going forward. We are exploring opportunities to expand this partnership on routes beyond the current Manila (Clark) - Singapore route. Finally, we are pleased to be recognised in the industry by being awarded the Mid-cap IPO of the year for 2010 by FinanceAsia” said Tony Davis.

Outlook Statement from the Company
The recent weather events on the east coast of Australia will have an adverse effect on earnings for Tiger Airways Australia in the fourth quarter. As a consequence, plans to increase the fleet beyond the current 10 aircraft in Australia have been deferred until April 2011. Tiger Airways Australia will increase its seat capacity by at least 20% for the period April to October 2011.

Given the growth opportunities in Asia, Tiger Airways Singapore will increase its capacity by 41% year-on-year for the period April to October 2011.

The Company is maintaining its plan to grow its fleet by 40%, from 25 aircraft currently to 35 aircraft by March 2012.