Tigerair cancels nine A320s - averting excessive capacity in the Singapore market

Tigerair's decision to cancel nine A320 aircraft that were to be delivered in 2014 and 2015 will provide some much needed relief in the Southeast Asian market, where there are increasing signs of overcapacity. Tigerair should be able to avert a potential bloodbath in Singapore, where its initial fleet plan envisioned an extraordinary nine additional aircraft over the next 13 months.

The cancellations, which were part of a deal with Airbus that includes orders for at least 37 A320neos for delivery from 2018, also give Tigerair more flexibility as it reviews options for its currently unprofitable affiliate in Indonesia. But while the revised fleet strategy improves the group's outlook, Tigerair still has a host of challenges to overcome.

Tigerair follows larger LCC group AirAsia in slowing down growth for 2014. More adjustments are likely as Southeast Asia's LCC fleet is still expected to grow by about 17% in 2014.