SINGAPORE – Tiger Airways, a low-fare airline partly owned by Singapore Airlines, said on Monday it may buy another low-cost carrier in Asia after soaring fuel costs and tough competition sent some of its rivals into tailspin.
Tiger Chief Executive Tony Davis told reporters he was in talks with six parties in Asia for potential joint ventures or acquisitions to boost growth.
“Given the volatility we’re seeing in the market, there may be opportunities for us to grow in the region through M&A activities,” said Davis, adding that it will tap on shareholder funds of S$24 million ($17.7 million) for such growth.
Davis added Singapore-based Tiger had no pressing need to raise funds from the stock market and that the poor market conditions made it a bad time to float its shares.
“An IPO will occur when all the circumstances are aligned, and when we have a need for funds to be injected, but not right now,” said Davis. Budget carrier Oasis Hong Kong Airlines went into liquidation earlier this month as high fuel costs and stiff competition triggered heavy losses, while Indonesia’s Adam Air was grounded in March after defaulting on payments for its plane purchases.
Tiger Airways, which last year started its fully owned low cost service in Australia and will launch a joint venture in South Korea by the end of this year, said it would grow by adding one new company each year to its portfolio.
Tiger runs a fleet of 12 Airbus A320s with 60 more on order and flies to 29 destinations in Asia Pacific. Davis said the airline will not raise its fuel surcharges or ticket prices to offset spiraling fuel costs but will manage other costs and could cut unpopular routes.
He expects Tiger to book a profit for the 12 months to March 2008, the first full-year profit since its launch in September 2004, as the carrier sold 2.25 million seats in the period, up by about half from a year ago.