Losses Continue at TigerAir Philippines
Tigerair Group continues to face challenges as each of the group's four carriers in Australia, Indonesia, Singapore, and the Philippines reported operating losses in the third quarter of 2013. Tigerair Philippines has been even more unprofitable relative to its sister carriers on an operating margin basis with losses of USD $19 million reported for the third quarter.
Tigerair Philippines has been operating as an affiliate of Tigerair since late 2010 and has yet to achieve profitability in the highly competitive Philippine market. It is hoped that changing market dynamics will eventually result in the carrier's profitability in the long term, but Tigerair Philippines does not enjoy the advantage of being one of the first players in the market with Cebu Pacific dominating the low-cost carrier market. With stiff competition from rival AirAsia Zest, the carrier could struggle to carve out a profitable niche.
Tigerair's fleet has remained at just five aircraft since mid-2012. However, the group is banking on recent consolidation including the strategic alliance of Air Asia and Zest Air along with the transition of PAL Express from a low cost carrier to a full service carrier to help improve market conditions. Tigerair Philippines is also counting on the opening of the Japanese market to boost its prospects along with the eventual opening of the Philippines-Korea market.
Tigerair Philippines recently applied for a number of new routes to Japan along with a number of other Philippine carriers following the successful renegotiation of a new bilateral air agreement between Japan and the Philippines. The Civil Aeronautics Board recently granted Tigerair permission to serve a number of new routes including: Manila-Narita, Manila-Osaka, Clark-Narita, Clark-Osaka, Cebu-Narita, and Kalibo-Narita.
The carrier is likely to launch some of the new routes within the next few months. An expansion beyond the current fleet of five will likely be needed in order to support its new expansion into the Philippine-Japan market as the carrier does not want to reduce its domestic presence following improved market conditions due to consolidation. Tigerair Philippines has revealed plans to reinstate flights between Manila and Davao but has not announced any further future route openings. With the opening of the new Davao route, Tigerair Philippines will operate five international and eight domestic routes.
Tigerair Group has committed to receive ten new Airbus A320 aircraft in 2015. While it is possible that some of these aircraft will be allocated to Tigerair Philippines, the carrier has previously indicated that it may go ahead and lease 2 to 3 new aircraft in 2014 to help support its growth and expansion. If it wants to open new Japanese routes in 2014, it is likely that the leasing of new aircraft will proceed. But in spite of ambitious expansion plans for Tigerair Philippines, the Tigerair Group remains cautious to ensure that expansion will not result in even higher losses.
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| Image Source: TigerAir Philippines |
Tigerair's fleet has remained at just five aircraft since mid-2012. However, the group is banking on recent consolidation including the strategic alliance of Air Asia and Zest Air along with the transition of PAL Express from a low cost carrier to a full service carrier to help improve market conditions. Tigerair Philippines is also counting on the opening of the Japanese market to boost its prospects along with the eventual opening of the Philippines-Korea market.
Tigerair Philippines recently applied for a number of new routes to Japan along with a number of other Philippine carriers following the successful renegotiation of a new bilateral air agreement between Japan and the Philippines. The Civil Aeronautics Board recently granted Tigerair permission to serve a number of new routes including: Manila-Narita, Manila-Osaka, Clark-Narita, Clark-Osaka, Cebu-Narita, and Kalibo-Narita.
The carrier is likely to launch some of the new routes within the next few months. An expansion beyond the current fleet of five will likely be needed in order to support its new expansion into the Philippine-Japan market as the carrier does not want to reduce its domestic presence following improved market conditions due to consolidation. Tigerair Philippines has revealed plans to reinstate flights between Manila and Davao but has not announced any further future route openings. With the opening of the new Davao route, Tigerair Philippines will operate five international and eight domestic routes.
Tigerair Group has committed to receive ten new Airbus A320 aircraft in 2015. While it is possible that some of these aircraft will be allocated to Tigerair Philippines, the carrier has previously indicated that it may go ahead and lease 2 to 3 new aircraft in 2014 to help support its growth and expansion. If it wants to open new Japanese routes in 2014, it is likely that the leasing of new aircraft will proceed. But in spite of ambitious expansion plans for Tigerair Philippines, the Tigerair Group remains cautious to ensure that expansion will not result in even higher losses.
How can they go up against a brand like pal more so now with the genius of mr ramon ang?
ReplyDeletedont underestimate tiger air philippines. by the mere fact its market share is growing both in domestic & international flights, it means that it is doing the right thing.
ReplyDeleteI dont wish tiger ill but pal has been loyal to this contry and the riding public for nearly eighty years npw. They deserve our loyalty too. Can you imagine this country without pal?
DeleteI don't want to offend anyone, but the fact one company operates for a long time in a particular country doesn't mean that the people will always be loyal to it. Tiger Air offer some good discounts and I often fly with them, it's good to have a couple of low-cost airlines to keep the competition alive.
ReplyDelete