Tiger Airways sank to a significant loss for full-year 2011-12, due to rising fuel prices and the grounding of its Australian unit last summer.
The Singapore-based low-cost carrier group recorded a net loss of SG$104.3 million (US$81.8 million) for the financial year ending 31 March 2012. The result marks a return to the red for the airline, following its 2010-12 full-year profit of SG$39.9 million.
The group’s revenues dipped slightly, down 0.7% to from SG$618.2 million, largely due to the six-week suspension of Tiger Airways Australia last July and August, and the subsequent reduction of services. The main factor contributing to the loss however, was the increase in jet fuel prices, which jumped 22.6% to SG$229.8 million. This contributed to a 12.0% rise in costs per available seat kilometre (CASK).
“It is without a doubt that the group’s financial results for the year ended 31 March 2012 were disappointing,” said Chin Yau Seng, Tiger’s Group CEO. “Clearly, the Tiger Airways Australia suspension by the Civil Aviation Safety Authority of Australia from 2 July to 11 August 2011 contributed significantly to the poor financial result.
“In an attempt to absorb the surplus capacity, Tiger Airways Singapore grew its seat capacity by 47% year-on-year. Encouragingly, Tiger Airways Singapore’s passenger numbers increased by 39%, albeit still lower than the growth in seat capacity.
“The new financial year presents us with an opportunity to close the books on financial year ’11-12 and focus on our growth strategies to pull the group back into profitability. We note that there are both opportunities and challenges in the new financial year. Fuel prices continue to hover at uncomfortably high levels and our challenge is to improve yields and boost ancillary revenue to compensate for the fuel cost impact,” he added.
Commenting on the outlook for 2012-13, Tiger said it is “moderating its seat capacity growth to 7%” during the April-October 2012 summer season, while Tiger Airways Australia is ramping up to 64 daily sectors (from 38 daily sectors) by the second half of 2012.
Tiger also plans to conclude a deal for a 40% stake in the Philippines’ SEAIR by the second quarter of the 2012-13 financial year.