Tigerair 2014 outlook gloomy following 3QFY2014 loss. Is there a silver lining in 2015?

Tigerair has reported net and operating losses for the quarter ending 31-Dec-2013 (3QFY2014) as all four of its subsidiaries or affiliates were in the red. The group's core operation in Singapore, which operates half of the group's fleet, was unprofitable for the second consecutive quarter as overcapacity led to a significant drop in both yields and load factors.

The outlook for Tigerair Singapore for 2014 is bleak as market conditions remain unfavourable. The group will be adding several more aircraft into the Singapore market, exacerbating the overcapacity situation.

If Tigerair can weather the current storm, the outlook for 2015 is brighter. Tigerair Taiwan is expected to launch in late 2014, absorbing some of the group's excess aircraft, while Tigerair Australia and Indonesian affiliate Tigerair Mandala should be in a better position following restructurings. The group is also now in the process of divesting its stake in Tigerair Philippines, a positive move but creating a short-term headache as the group will need to redeploy aircraft exiting the Philippines into markets which are already suffering from overcapacity.