Falling Knife of the Week: Tiger Airways Holdings Limited


Tiger Airways Holdings  (SGX: J7X), which is a group of budget carriers operating in the Asia-Pacific region, fell slightly more than 6% in the week.

The company, in which Singapore Airlines (SGX: C6L) has a major stake, was started in 2004 and it comprises of three airlines, namely Tigerair Singapore, Tigerair Australia and Tigerair Mandala. Its whole network extends to over 50 destinations across 14 countries in the Asia-Pacific region.

However, come 1 July this year, Tigerair Mandala will cease operations, as announced last week. Tigerair and its partners, Saratoga Group and PT Cardig International, feel that Mandala would not be able to sustain its operations due to challenging operating environments.

In January 2012, Tiger Airways Holdings had acquired a 33% stake in Tigerair Mandala, and in September 2013, it was increased to 35.8%.

Mr Lee Lik Hsin, Chief Execuitive Officer of Tigerair, commented on Tigerair Mandala’s demise, “Mandala’s financial results reflect the challenges that it is facing in the difficult operating environment. The partners in Mandala have jointly come to the conclusion to cease funding the airline’s operations. Nevertheless, Indonesia remains an important market for us, and we will continue to maintain an active presence through Tigerair Singapore.”

Tiger Airways Holdings is currently trading at 7.5 times its book value at its price of S$0.46. It has clocked cumulative losses of S$373 million in its last three completed financial years.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.