Tigeair orders 37 Airbus aricraft worth S$4.8b for delivery by 2018

Meant to secure dominance in budget travel.

Tigerair has entered into an agreement with Airbus and Pratt & Whitney (P&W) for the order of 37 fuel-efficient Airbus A320neo aircraft powered by Pratt & Whitney PW1100G-JM engines. The purchase agreement also gives Tigerair the option to increase its order by up to 13 additional aircraft and convert the A320neos into the larger A321neo model

The transaction is valued at USD3.8 billion (S$4.8 billion) based on the manufacturer’s list price, although the negotiated price was significantly lower..

Consequent to the agreement, the airline’s existing order of nine Airbus A320 aircraft, that were part of a larger 2007 order, will now be cancelled. These aircraft were originally scheduled for delivery in 2014 and 2015.

This arrangement with Airbus and P&W reinforces Tigerair’s commitment to grow in a sustainable manner. The cancellation of the existing nine orders, together with the staggered delivery of the new A320neo aircraft over a period of eight years from 2018 to 2025, will allow Tigerair to optimally manage its capacity going forward, improve its cost efficiency, and advance its fleet modernisation plan.

Tigerair’s Group CEO Koay Peng Yen, said, “We have re-calibrated our strategy and taken the necessary steps to re-position Tigerair for a brighter future. This deal effectively dissipates some concerns over a potential capacity overhang in the next couple of years. It also allows us to continue building on our leadership position in budget travel at a measured pace.”

"We are extremely pleased that Tigerair has reaffirmed its commitment to the A320 Family with this important new order,” said John Leahy, Chief Operating Officer, Customers, Airbus. "This order once again underscores the unbeatable operating economics offered by our single aisle product line for airlines from both the low cost and full service markets.”

“Pratt & Whitney is delighted to introduce the PurePower engine family in Singapore, a very important region for the company,” said Dave Brantner, president, Pratt & Whitney Commercial Engines. “We are also confident that we will enter into service with an engine that meets or exceeds the fuel burn specifications as promised which will provide superior environmental and economic performance.”

The new A320neo is the most fuel-efficient version of Airbus' single aisle aircraft. The combination of efficient Pratt & Whitney engines and large "Sharklet" wing-tips promises to deliver approximately 15% greater fuel efficiency compared to the current generation A320ceo. This translates into an estimated S$40million in savings annually, based on the current fleet’s fuel expenditure. The A320neos will replace Tigerair Singapore’s A320ceos, which will be gradually phased out upon the expiry of their respective leases.

The A320neo which accommodate 18-inch width seats, will ensure that passengers' comfort is not compromised. Along with this, it has a longer flight range, which will enable Tigerair to fly to new and promising destinations.