Tiger Airways launches IPO
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Singapore, 13 January 2010 - Tiger Airways Holdings Limited (“Tiger Airways” and together with its subsidiaries, the “Group”) today announced the launch of the initial public offering of its ordinary shares (“Shares”), following the registration of its prospectus by the Monetary Authority of Singapore (“MAS”) today. Tiger Airways is the first low-cost airline to seek a listing on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”).
With a focus on route profitability and commitment to a disciplined low-cost business model, Tiger Airways aims to establish airlines in markets where it believes its low-fare and low-cost business model has exceptional potential for sustainable profitability.
Tiger Airways currently operates from bases in three locations - Singapore’s Changi Airport Budget Terminal, Tullamarine Airport in Melbourne and Adelaide Airport in South Australia. The Group started with an initial fleet of two aircraft, which has now grown to 17 Airbus A320-family aircraft, and is committed to increasing its fleet size to 68 by December 2015. Tiger Airways’ route portfolio covers a total of 33 airports across 11 countries and territories across the Asia Pacific region[1].
Commitment to a low-cost business model and focus on route profitability
Based on other successful low-cost airlines, such as Europe’s Ryanair, Tiger Airways’ business model involves scrutinising every single aspect of the business to remove non-essential costs without compromising passenger safety, security or punctuality. The disciplined approach to executing this model has given Tiger Airways the ability to achieve one of the lowest operating costs for any start-up airline and offer passengers competitive low fares on a consistent and sustainable basis.
Tiger Airways is also focused on developing a portfolio of routes which have the potential to deliver consistently high passenger load factors at attractive yields. The Group conducts a monthly analysis of routes to ensure they deliver sustained profitability and adopts an aggressive approach of using low fares to stimulate air travel and to encourage early purchases by customers which build high load factors well in advance of travel.
Markets and Growth Opportunities for Tiger Airways
The Asia Pacific region is expected to be the largest air travel market globally by 2020 and air travel in this region is projected to grow at an average annual rate of 6.5% over the next 20 years.
Tiger Airways Singapore Pte. Ltd.’s (“Tiger Airways Singapore”) base is located in Southeast Asia, one of the world’s most dynamic regions for air travel where passenger air travel is forecast to grow at a compound annual growth rate of 8.1% between 2008 and 2028.
Tiger Airways Australia Pty Limited (“Tiger Airways Australia”) benefits from the well-established and highly developed Australian aviation industry, which is the fourth largest domestic travel market in the Asia Pacific region. Air transport in Australia is fundamental to tourism and international trade and is a major driver of the Australian economy. Air travel growth in Australia is forecast to average 5.1% per year over the next 20 years and furthermore, Australians have a higher propensity to travel per capita than any other developed country, including the United States and the United Kingdom.
Commenting on the initial public offering, President and Chief Executive Officer of Tiger Airways, Mr Tony Davis said: “The Offering is an important milestone for Tiger Airways. Our Singapore operations achieved profitability in its third full year of operations and have been reporting annual profits ever since. We have also established ourselves as a major domestic airline in Australia, flying to every state and territory in the country. We are proud of what we have created and achieved, and are pleased that over 11 million passengers have flown with Tiger Airways since our beginnings in 2004.
We believe that our focus on providing customers with affordable air travel positions us well for growth as Asia and Australasia is the world’s most populous region, with the fastest growing aviation market in the world. As a homegrown company, we are delighted to be the first low-cost airline to seek a listing in Singapore and to offer potential investors this opportunity to participate in Tiger Airways’ growth story.”
Strategies and Future Plans
Commenting on the Group’s future plans, Mr Tony Davis said: “The under-developed low-fare, low-cost model in the majority of countries in the region presents opportunities for our future growth. We are now ready to embark on the next stage of growth, and believe that a listing will help fuel that growth.
We intend to apply our proven low-cost airline model to offer domestic and/or international air travel in other Asian markets through the creation of additional operating airlines. We also plan to increase frequency of flights on existing routes and expand operations by commencing new routes between the airports we now serve, as well as add new destinations from our existing bases in Singapore and Australia. Part of the IPO proceeds will be used to fund our planned acquisition of aircraft and to establish potential new airlines and/or operating bases, as and when plans are finalised.”
Use of Proceeds
Based on the maximum offering price of S$1.65, Tiger Airways’ net proceeds from the Offering (as defined below) will be approximately S$246.8 million. Tiger Airways intends to use its net proceeds from the Offering primarily for the following purposes:
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