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http://business.theage.com.au/business/tiger-hides-the-colour-of-its-stripes-20080817-3x3x.html
Tiger's parent company last month sought a three-month extension to file its full-year financial accounts with Singaporean regulators, but financial information from the budget airline reveals its Australian arm lost about $S28 million ($A23 million) in its first four months of operation.
If true, this counters the constantly upbeat rhetoric of Tiger chief executive Tony Davis on the inroads it has made into Qantas-Jetstar and Virgin Blue's share of the domestic market.
The estimate was arrived at by reconciling the $S37.8 million profit reported by Tiger's Singapore operations two weeks ago and comments made by the chief executive of Tiger's main shareholder, Singapore Airlines.
"I can safely say that I am not betraying any confidence for FY 07-08. (Tiger Aviation's) profit came close to $S10 million," Chew Choon Seng told analysts at a profit briefing earlier this year. If so, Tiger Australia, Tiger's only operation outside Singapore, would have lost about $S28 million for the period.
There are suspicions Tiger Australia's losses this financial year could have deepened, with oil prices surging as much as 43% to a high of $US145 a barrel since the end of the March.
Tiger has declined to comment on the estimates.
"We will be coming out with the consolidated Tiger Aviation accounts when they are ready," a Tiger spokesman said.
Mr Hobbs said the extension Tiger sought from Singapore's Accounting & Corporate Regulatory Authority to file its accounts was due to a company restructure. This involved the formation of Tiger Aviation to act as holding company for all Tiger's operations in Singapore, Australia and its yet-to-be-launched Korea and Philippines franchises.
While Tiger is coy on stating whether it is making money, it is more forthcoming with less-sensitive information. This month, it boasted how its Australian and Singapore operations reported 73.7% passenger growth and a 58% rise in revenue in the year to June 30.
There are suspicions Tiger is under pressure from shareholders to lift its performance. A long-serving Singaporean Airlines executive was recently appointed Tiger's chief financial officer, prompting talk its 49% owner wants to keep a closer eye on the running of the airline. There is also speculation Tiger's other key shareholders, private equity firm Indigo Partners and Ireland's Ryan family, might be losing patience.
While Tiger's results may be some way away, Virgin Blue and Qantas are due to report their full-year results this week. They are expected to not only show a surge in fuel costs but a slowing in domestic demand.
While Qantas is expected to be hit by the slowing in high-yielding corporate traffic that comes with an economic slowdown, low-cost airlines such as Tiger could be in for a rougher ride. One problem is that low-cost carriers, which cram seats on to their planes to lower their cost-base, will be under greater pressure to fill those seats.
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- Tiger hides the colour of its stripes</HEADLINE>
- Scott Rochfort
- August 18, 2008
Tiger's parent company last month sought a three-month extension to file its full-year financial accounts with Singaporean regulators, but financial information from the budget airline reveals its Australian arm lost about $S28 million ($A23 million) in its first four months of operation.
If true, this counters the constantly upbeat rhetoric of Tiger chief executive Tony Davis on the inroads it has made into Qantas-Jetstar and Virgin Blue's share of the domestic market.
The estimate was arrived at by reconciling the $S37.8 million profit reported by Tiger's Singapore operations two weeks ago and comments made by the chief executive of Tiger's main shareholder, Singapore Airlines.
"I can safely say that I am not betraying any confidence for FY 07-08. (Tiger Aviation's) profit came close to $S10 million," Chew Choon Seng told analysts at a profit briefing earlier this year. If so, Tiger Australia, Tiger's only operation outside Singapore, would have lost about $S28 million for the period.
There are suspicions Tiger Australia's losses this financial year could have deepened, with oil prices surging as much as 43% to a high of $US145 a barrel since the end of the March.
Tiger has declined to comment on the estimates.
"We will be coming out with the consolidated Tiger Aviation accounts when they are ready," a Tiger spokesman said.
Mr Hobbs said the extension Tiger sought from Singapore's Accounting & Corporate Regulatory Authority to file its accounts was due to a company restructure. This involved the formation of Tiger Aviation to act as holding company for all Tiger's operations in Singapore, Australia and its yet-to-be-launched Korea and Philippines franchises.
While Tiger is coy on stating whether it is making money, it is more forthcoming with less-sensitive information. This month, it boasted how its Australian and Singapore operations reported 73.7% passenger growth and a 58% rise in revenue in the year to June 30.
There are suspicions Tiger is under pressure from shareholders to lift its performance. A long-serving Singaporean Airlines executive was recently appointed Tiger's chief financial officer, prompting talk its 49% owner wants to keep a closer eye on the running of the airline. There is also speculation Tiger's other key shareholders, private equity firm Indigo Partners and Ireland's Ryan family, might be losing patience.
While Tiger's results may be some way away, Virgin Blue and Qantas are due to report their full-year results this week. They are expected to not only show a surge in fuel costs but a slowing in domestic demand.
While Qantas is expected to be hit by the slowing in high-yielding corporate traffic that comes with an economic slowdown, low-cost airlines such as Tiger could be in for a rougher ride. One problem is that low-cost carriers, which cram seats on to their planes to lower their cost-base, will be under greater pressure to fill those seats.
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