Tiger Airways PH aims to triple revenues

MANILA, Philippines – The newly branded Tiger Airways Philippines (formerly South East Asian Airlines or SEAir) forecasts P5 billion in revenues for 2013, around 3 times what it made in 2012, said the budget carrier’s CEO Olive Ramos.

“We are confident that this growth can be supported by the bullish tourism targets of the Department of Tourism and the increasing number of traveller from wider segments of the society,” Ramos said in a press conference on Thursday, June 27. 

The budget airline intends to beef up its existing fleet of 5 aircraft of Airbus A320s and an A319 to 25. Ramos said the airline would be acquiring at least 3 to 4 aircraft per year over the next 3 to 5 years as it intends to increase its flights to existing destinations and mount flights to more destinations.

“Investment will come from our internally generated funds. We generally use this aircraft because we ensure that we can maintain a young fleet,” said Ramos.

Singapore-based Tiger Airways unit Roar Aviation III Pte Ltd had acquired a 40% stake in SEAir from the Philippines carrier’s existing foreign shareholders for $7 million. The investment in Seair is Tiger’s second joint venture after it acquired a 33% stake in Mandala Airlines in Indonesia.

The rebranded name of Tiger Airways Philippines was approved by the Securities and Exchange Comission on March 31. Laurente said the other 60% of Tiger Airways Philippines is owned by a group of Filipino businessmen.

According to Ramos, the company plans to repaint all aircraft to Tiger Airways Philippines by October 2013.

New routes

Tiger Airways Philippines currently flies to Singapore, Bangkok, Hong Kong, and local destinations such as Clark, Laoag, Bacolod, Kalibo, Cebu, Iloilo, Tacloban, Pueto Princesa.

A Singapore-to-Kalibo route will be launched on July 18, making it the only carrier to directly fly this route.

The airline is awaiting approval from the government to fly out of NAIA. “We’re looking to launch international flights out of Terminal 4. We have already touched base with the government agencies that can assist in this,” said Ramos.

According to Ramos, once granted the slot in NAIA, they are looking to boost their Singapore, Bangkok and Hong Kong destinations.

Not overcrowded

While many analysts are citing an overcrowded Low Cost Carrier (LCC) market, Ramos said there is a market for more carriers.

“There is no oversupply at this point. It’s only now you see the middle class growing and more interested in travelling,” said Ramos.

Tiger Airways Philippines currently holds a 3% market share, which it aims to boost to 5% within the year.

“We fly to these destinations where they want us to fly. We are market-driven. It’s the choice of the market. We’re giving them a choice. We’re back to basics — safety on reliability, on-time performance and the basic needs that should be there,” said Jose Laurente Jr, VP for Commercial at Tiger Airways Philippines.

Laurente assures that this will not eat into the profits of Tiger Airways’ other subsidiaries in Indonesia and Singapore. 

“With the Indonesia and Singapore brands, they fly side by side but they have two different flight numbers and different market types. In Jakarta they cater to their own market. They have overseas workers who travel to Singapore so they don’t really compete with each other even if they fly the same route,” said Laurente.

In March, Tiger Airways Holding Ltd, parent company of budget carrier Tiger Airways announced its plans to raise $297 million to fund plans for future Asian expansion, specifically in Indonesia and the Philippines. 

“The Tiger Group has nearly doubled its capacity in the past 4 years, and is now flying about 6.5 million passengers annually. We have a strong leadership position in Singapore and have invested in two fast-growing markets, namely Indonesia and the Philippines,” Koay Peng Yen, CEO of Tiger Airways, said in a previous interview. – Rappler.com