TigerAir finally rides the tailwind as it flies towards recovery path

It aims to overturn its four winless years.

Reaping time has now come for the budget airline, as it rides off its loss-making overseas operations, rationalised its fleet size and removed its non-profitable routes.

These measures has also helped Tigerair to report its fourth consecutive quarter of yield improvement.

According to analysts from RHB Research, the magnitude of the airline’s losses has also reduce, posting a $12m loss in 2Q.

RHB also remains optimistic for Tigerair’s earnings on the near term, as 3Q is a seasonally peak quarter, enabling the airline to report continuing yield improvements amidst the addition of a new destination in India and the reopening of an old destination in China.

We maintain our view that Tigerair is on track for earnings recovery after four years of losses. We expect the airline to deliver strong growth in FY17, aided by low fuel prices and yield improvements. Its average hedge fuel price has dropped to USD76/barrel (bbl) from USD119/bbl in the last four quarters,” RHB said.

“With no expansion planned for its rationalised fleet of 23-24 aircraft, and benefits from its close tie-up with Singapore Airlines (SIA SP, NR) and its affiliates, should support elevated load factor and yield improvements,” they added.