Singapore’s Big Loser of the Week: Tiger Airways Holdings Limited

Credit: hobvias sudoneighm

From last Friday to this Thursday, budget carrier Tiger Airways Holdings Limited (SGX: J7X) has slumped by some 7% to close at S$0.325.

Since the local share market, as represented by the Straits Times Index (SGX: ^STI), “only” lost 1.6% in value, Tigerair is certainly a big loser in the stock market this week.

The airline, which is majority-owned by Singapore Airlines Ltd (SGX: C6L), was established in 2004 and got listed in our bourse six years later. It currently flies to 37 destinations across Asia.

On Tuesday, Tigerair released its financial results for its fiscal fourth-quarter (the three months ended 31 March 2015). In that quarter, revenue had increased 5% year-on-year to S$172.2 million due to higher ticket sales. Tigerair also gets revenue from selling items on board the aircraft like food, drinks, and so on.

Moving down the income statement, the budget airline saw a net loss of S$18.8 million; while a loss is never welcome, that is actually a remarkable improvement from the loss of S$95.5 million that was seen a year ago. The better showing was due to the airline’s turnaround efforts and a lower fuel price. Regarding the latter, the price of oil has been on a decline since June last year.

For the whole fiscal year, revenue came in at S$677 million, a decline of 9.2%. The lower revenue brought with it even more red-ink; Tigerair reported a loss of S$264 million for FY15 (financial year ended 31 March 2015), down from the loss of S$223 million seen in FY14. It’s worth noting that this is the fourth straight annual loss suffered by Tigerair.

Going forward, Tigerair said that it will continue its collaboration efforts with its parent, SIA, and Scoot, the long-haul budget carrier arm of SIA. Doing so would allow Tigerair to tap into the “increased connectivity and market access that the SIA Group helps to bring”.

Tigerair also commented that it will continue with its turnaround efforts by optimizing its fleet size and improving passenger yields and loads. Lower fuel prices, if it persists, can be a tailwind for the airline too.

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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.