Tigerair incurs another loss in 1Q. Turnaround hinges on increased transit traffic and partnerships

Singapore-based LCC group Tigerair continues to struggle, incurring a net loss of SGD65 million (USD52 million) for the quarter ending 30-Jun-2014 (1QFY2015). Tigerair Singapore was in the red for the fourth consecutive quarter and losses continued to mount at Tigerair Australia and its now shuttered Indonesian joint venture, Tigerair Mandala.

The Tigerair Group is in the process of implementing a new strategy aimed at improving profitability by driving more transit traffic at its Singapore hub, relying more on overseas sales and forging and deepening partnerships. Meanwhile the group will maintain capacity levels in Singapore, its only remaining Southeast Asian operation, as part of an effort to boost load factors and eventually yields in a challenging marketplace that is suffering from overcapacity.

The new strategy is necessary and could improve Tigerair's long-term outlook. But for at least the short term Tigerair's turnaround efforts face huge obstacles, including unfavourable market conditions and challenges finding new homes for its surplus aircraft.