Tiger Airways

Phillip Securities Research on 11 Oct2012

TIGER Airways announced its operating statistics for September 2012. Traffic recorded by Tiger Airways Singapore (TAS) increased by 7 per cent y-o-y with passenger load factor unchanged at 79 per cent. Traffic recorded by Tiger Airways Australia (TAA) was significantly higher than the same period last year with passenger load factor at a higher level of 84 per cent. While September is a seasonally weaker month, we are slightly disappointed with the relatively low load factors reported for TAS. The poor TAS operating performance in September 2011 was a result of overcapacity in Singapore as the airline took in higher than expected aircrafts with the grounding of its fleet in Australia. Hence, we had expected stronger load factors this year as the overcapacity situation was no longer present. Data points reported for TAA were encouraging as the airline probably benefited from the launch of its 2nd Australian base in Sydney.

We rate Tiger Airways as "sell" with TP of $0.45 and expect a mildly negative reaction to this announcement.

SELL