Post by odie on Oct 11, 2014 19:12:29 GMT 7
SINGAPORE – Tiger Airways Holdings, the loss-making budget carrier partly owned by Singapore Airlines, fell to a record low after saying it was reviewing funding options.
Tiger Air plunged 5.1 per cent to 37.5 Singapore cents at the close of trading today (Oct 10), the lowest since Jan 22, 2010, when the company’s shares began trading. The carrier has declined 26 per cent this year, compared with a 1.8 per cent gain for the Straits Times Index.
“Investors are worried that Tiger Air might need to do a rights issue,” said UOB Kay Hian analyst K Ajith. The carrier may need at least S$150 million in new funds, he said.
Tiger Air is reviewing funding options, including a rights issue, and will sublease 12 planes to IndiGo, an Indian low-cost carrier, at a discount in light of overcapacity in the industry, the airline said on Thursday.
Most of these planes were previously operated by Tiger Air’s lossmaking Philippines and Indonesian ventures and were returned to the group after Tiger sold its Philippines business to Cebu Pacific and shut its Indonesian operations.
Excess capacity and competition have pushed down fares at budget carriers, forcing some including AirAsia to defer plane deliveries and cancel orders.
Tiger Air’s net loss widened to S$65.2 million in the quarter ended June from S$32.8 million a year earlier because of costs incurred from closing its Indonesian venture and operations in Australia. The loss added to the red ink that has underlined Tiger’s report card almost every quarter over the past three years.
Tiger Air, which is 40 per cent owned by Singapore Airlines, installed a new chief executive in May. Mr Lee Lik Hsin, who replaced Mr Koay Peng Yen, said in his first results briefing in July that he was confident that Tiger Air was finally in a good position to begin making a turnaround after cutting non-profitable ventures and routes.
“The whole company is confident that we will be able to do better,” said Mr Lee in July. “Our latest results showed that much of the issue or drain came from joint ventures that weren’t able to work. Now, with our exit from these joint ventures, I would say that everyone in the company is confident that we are in a good position moving forward.”
The fundraising will help Tiger Air strengthen its balance sheet and meet corporate requirements, the company said in a statement after the market’s close today.
Tiger Air plunged 5.1 per cent to 37.5 Singapore cents at the close of trading today (Oct 10), the lowest since Jan 22, 2010, when the company’s shares began trading. The carrier has declined 26 per cent this year, compared with a 1.8 per cent gain for the Straits Times Index.
“Investors are worried that Tiger Air might need to do a rights issue,” said UOB Kay Hian analyst K Ajith. The carrier may need at least S$150 million in new funds, he said.
Tiger Air is reviewing funding options, including a rights issue, and will sublease 12 planes to IndiGo, an Indian low-cost carrier, at a discount in light of overcapacity in the industry, the airline said on Thursday.
Most of these planes were previously operated by Tiger Air’s lossmaking Philippines and Indonesian ventures and were returned to the group after Tiger sold its Philippines business to Cebu Pacific and shut its Indonesian operations.
Excess capacity and competition have pushed down fares at budget carriers, forcing some including AirAsia to defer plane deliveries and cancel orders.
Tiger Air’s net loss widened to S$65.2 million in the quarter ended June from S$32.8 million a year earlier because of costs incurred from closing its Indonesian venture and operations in Australia. The loss added to the red ink that has underlined Tiger’s report card almost every quarter over the past three years.
Tiger Air, which is 40 per cent owned by Singapore Airlines, installed a new chief executive in May. Mr Lee Lik Hsin, who replaced Mr Koay Peng Yen, said in his first results briefing in July that he was confident that Tiger Air was finally in a good position to begin making a turnaround after cutting non-profitable ventures and routes.
“The whole company is confident that we will be able to do better,” said Mr Lee in July. “Our latest results showed that much of the issue or drain came from joint ventures that weren’t able to work. Now, with our exit from these joint ventures, I would say that everyone in the company is confident that we are in a good position moving forward.”
The fundraising will help Tiger Air strengthen its balance sheet and meet corporate requirements, the company said in a statement after the market’s close today.