Lean and hungry Tiger flies into the black
A Report in The Australian says that Tiger Airways says it has flown into the black and claims its seat-kilometre costs are now the second lowest in the world.
Chief executive Tony Davis said this week that the Singapore low-cost carrier had been cash-flow-positive for two years in Singapore, and profitable for the last two quarters.
Mr Davis had been coy about revealing the airline financials, but stakeholder Singapore Airlines will soon report a contribution from Tiger Airways in its accounts.
Mr Davis also declared yesterday that Tiger Airways now had world’s second lowest available seat-kilometre (ASK) costs after Malaysia’s AirAsia.
“We are reducing our costs all the time,” he said.
While Mr Davis declined to give a figure, Jetstar’s ASK cost, excluding fuel, fell 7.4 per cent last year to just 5.49 cents.
AirAsia boasts costs of just 1.78c per ASK, excluding fuel.
Commenting on the airline’s initial Australia-based fleet of just five A320 aircraft, Mr Davis said economy of scale issues were not a problem because most of the back-office support was coming from Singapore.
“Or start-up costs (for Australia), such as financing cash flow and brand establishment, didn’t apply,” he said.
He noted that the airline’s air operator’s certificate was achieved on time and under budget — a first in Australia’s recent history — thanks to support from the Singapore-based operation.
He said the airline would stick with its simple low-cost model and would not lose money in Australia.
“W are confident that, with the kind of fares that we are offering on a promotional basis and a sustained basis, we can make money here in Australia,” he said.
“Forward sales are significantly ahead of budget and we are pleasantly surprised by the level of demand.”
A Report by The Mole from The Australian
John Alwyn-Jones
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