Overview - Tiger Airways

Tiger Airways – Big plans for Singapore's lowest cost carrier

Since its Sep-04 launch of operations, Tiger Airways has shown its pedigree. The Ryan family, founders of Ryanair, may have only a small stake in the LCC through their investment vehicle, Irelandia, but its impact is apparent in the carriers focus.

Tiger is essentially the only carrier operating at Singapore's Budget Terminal, which it migrated to in Mar-06. The move saves it over SGD1 million p/a in aerobridge costs and also allows fast aircraft turnaround times (one of the factors behind its industry-leading 14 hours of daily aircraft utilisation). 500,000 passengers have used the Budget Terminal in the last six months, boosting Tiger's passenger volume by more than 80%. The low cost impetus is so critical that the company jettisoned ground handler SATS – a wholly owned subsidiary of its parent company Singapore Airlines – in favour of Swissport.

Although the carrier doesn't release financial information, indications are the revenue growth process has not been as successful as cost containment efforts. The carrier, which pursues extensive ancillary revenue generation activities, operates a schedule that favours destination numbers over frequency, says it is on track to make profits in year three.

Outlook positive for low cost operator

CEO, Tony Davis, says the carriers plan has always been to develop into a pan-Asian carrier. Because of Singapore's relatively small local market size and the region's restrictive bilaterals (which preclude service to natural markets Kuala Lumpur, Jakarta and Bali), Tigers growth will come from other countries, likely through joint venture agreements. Accordingly, it signed a 29-Sep-06 deal with South East Asian Airlines under which the Philippine carrier will operate two Tiger-branded A320s out of Manilas Clark Airfield.

The carrier is also examining plans to establish a second base, with sites in Indonesia, Malaysia and Philippines as primary candidates and expand to up to five bases within the region in the next three years.

Tiger Airways now flies to five cities in Thailand, two in Vietnam (Ho Chi Minh City and Hanoi), four in China (Macau, Guangzhou, Haikou and Shenzhen), Indonesia (Padang), the Philippines (Clark-Manila), Australia (Darwin) and Singapore. By 2010, the carrier expects to expand its fleet to 20 aircraft.

With its focus on costs and expansion in the region's developing LCC sector, Tiger is poised for future success.

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