SINGAPORE: Tiger Air plans to expand in Asia
Updated
Low cost airline Tiger Airways has announced a restructure the company says will help it to expand further throughout Asia. The Singapore based company is forming a parent with wholly owned carriers and the flexibility to create new joint ventures.
SNOWDON: The three year old low cost airline is forming a parent company to be called the Tiger Airways Group. It becomes the parent for its wholly-owned Singapore and Australian-based Tigers. They might in future be joined by new subsidiaries or joint ventures as the group expands.
Tiger expects to start domestic flights in Australia in November, and says its 15 office staff in its new Melbourne office won't be affected by the changes.
Chief Executive, Tony Davis, becomes CEO of the restructured group and says Singapore will become the group headquarters, allowing administrative operations to be streamlined.
DAVIS: It's really not a financial issue at all. We were keen to make sure that both the Australian business headquartered out of Melbourne and our business in Singapore were basically sitting along side each other, rather than either one company reporting in through the other. So it's more a structural reorganisation, but it could be other airlines as we look to expand our geographic coverage in the Asia-Pacific region.
SNOWDON: Tiger is funded by private investors, including the successful founder of Ryan Air, Singapore Airlines and the Singapore Government's Temasek Holdings, which also holds a slab of Jetstar with Qantas. Tiger Airways says it carries three million passengers a year with a 46 per cent increase in the June quarter from the year before. Revenues are up 84 per cent for the same period. Although as a private concern, it doesn't publish financial results.
Tony Davis says the trading position is good.
DAVIS: We haven't had to ask our shareholders for any cash since October of 2005. That situation hasn't changed. The restructure doesn't involve any additional funds coming into the business, because there's no need for them at the moment. So we're very happy with the group performance at the moment, and the change in structure that we've announced today gives us that solid foundation for further growth.
SNOWDON: Tiger will be competing with the Qantas budget operation, Jetstar and Virgin Blue in the Australian market.
It's just announced it's also expanding to India and adding a fifth stop in China and earlier this year put in an order for 50 new planes. It also flies to Singapore from Australia's West Coast. To keep expanding, the company has put its faith in the franchise model. It provides the brand name and support and expects the individual businesses to compete for planes. But until it goes public in Australia and gains local shareholders, Tiger won't be able to expand its international routes from that particular base.
Tony Davis says there are no plans for that for now.
DAVIS: At the moment we've got plenty to focus on with the domestic routes that we're looking at and those considerations in terms of further expansion in international services are something we can look at in the future. We haven't made any firm decision as to how many of those aircraft, for example, will come into the Australian domestic market or how many of them will stay in Singapore and operate the international services from Singapore. So we've kept our options open in terms of where we position those aircraft. But clearly with the group structure, the management team in Australia, I'm sure will be fighting hard to bring more aircraft into the domestic routes in Australia.
Presenter: Karon Snowdon
Speakers: Tony Davis, Chief Executive of the Tiger Airways Group
