Tiger Airways Expects Net Loss; Receives Complaints
By Chun Han Wong, The Wall Street Journal | Oct. 02, 2011
Singapore-based budget airline Tiger Airways Holdings Ltd. expects its losses to have widened in the second quarter from the first, mainly due to its recent Australian flight suspension, and has received complaints against its Philippines operations and its marketing material in Australia.
The announcements come just weeks after the carrier flagged a likely net loss for the current fiscal year, citing high fuel costs and expected losses suffered by its Australian unit due to a six-week flight ban imposed in July over safety concerns.
Tiger expects to record for the three months ended Sep. 30 a net loss "markedly larger" than the 20.6 million Singapore dollars (US$15.6 million) loss posted in the first quarter this year, it said in a statement late on Friday. The carrier reported a second-quarter net profit of S$14.1 million a year earlier.
Factors contributing to the expected second-quarter net loss include Tiger Airways Australia's suspension, lower revenue due to reduced load factors, and higher fuel costs, the airline said.
Tiger, which is 32.8%-owned by Singapore Airlines Ltd., had previously estimated the suspension to cost about S$2 million a week, and now expects its Australian unit to increase expenses in the short term as it complies with conditions imposed by Australia's aviation safety regulator for resuming operations.
In a separate statement on Monday, Tiger said it received a letter of complaint against its Singapore unit via the Civil Aeronautics Board of the Philippines.
"The (Philippines) complaint suggested that the suspension of the operations of Tiger Airways Australia Pty. Ltd. in July 2011 by the Australian regulator, the Civil Aviation Safety Authority, raises similar questions about (Tiger Airways Singapore) operations to the Philippines," the airline said.
A CAB official confirmed the board had relayed to Tiger a complaint made by an unnamed third party, but didn't provide further details.
Tiger said the Philippines complaint "is without merit," and has filed a response with a proposal to dismiss the complaint.
Also on Monday, Tiger said the Australian Competition and Consumer Commission has filed a complaint over alleged inaccuracies in a marketing email sent to subscriber customers.
Its Australian unit is in consultation with authorities there on the issuance of "an appropriate corrective notice upon which the complaint will likely be resolved," it added.