Tiger Airways Holdings – 3QFY11 (Derrick Heng)

Recommendation: Hold

Previous close: S$1.74

Fair value: S$1.64

• Revenue increased by 22% to S$170.4mn, while PATMI increased 60% to S$22.6mn.
• Profit beat our estimates for the quarter, but the Australia business will likely be a drag in 4QFY11.
• Ancillary revenue to grow, passenger fares to come under pressure.
• Upgrade recommendation to Hold with target price of S$1.64.


 

/phillipS

 

Break of key support suggests further correction

More downside ahead. Tiger Airways is likely to see further downside pressure following repeated failed attempts to retest its 50-DMA resistance recently; this was later followed by a bearish break below the $1.79 key support yesterday.

Indicators still bearish. With the RSI still slipping towards the oversold region and MACD having just initiated a bearish crossover recently; these suggest that the downside momentum is still intact.

Immediate support at $1.65. We expect the correction to test the next key support at $1.65 (major trough in May ’10 and lower channel boundary), breaking which, we see the next key support around $1.50 (resistance-turned-support).

Initial resistance at $1.79. Above the newly established support-turned-resistance at $1.79, we peg the subsequent resistances at $1.94 (peaks in Apr and Nov ‘10) and $2.17 (key peak in Sep ‘10).

By OCBC Research.

Tiger Airways Holdings – Update (Derrick Heng)

Recommendation: Sell

Previous close: S$1.80

Fair value: S$1.65

§         Tiger Airways carried 1,474 passengers for the quarter as compared to 1,300 passengers a year ago.

§         Passengers carried outpaced growth in capacity by 0.6%.

§         High load factor of 88.1% for the quarter is encouraging.

§         Maintain Sell recommendation on valuation grounds with target price of S$1.65.

/PS/

 

Tiger accuses AirAsia boss of racism

Conrad Raj

editor-at-large

conrad@mediacorp.com.sg — Tiger Airways has accused chief executive of Malaysian rival AirAsia Tony Fernandes of passing “racial remarks” and “resorting to racial slurs” against the Singapore-based carrier.The Bangkok Post, questioned plans by Tiger to form a joint venture with Thai Airways International (Thai), which would compete against Mr Fernandes’ own Thai AirAsia.Today, Mr Fernandes claimed his remarks were not racial and that his statements were “clearly an honest assessment of them”.

SINGAPORE

The spat erupted after Mr Fernandes, in an interview with

Noting that Thai AirAsia was run by a Thai management team, the AirAsia chief told the newspaper:

“We’re Asians, not a bunch of white guys running the airline”,

referring to the management team at Tiger, which is helmed by Mr Tony Davis, who is the airline’s president and group CEO.

Responding to his comment, Tiger Airways said yesterday: “We are disappointed and surprised to read reports that the head of AirAsia has passed racial remarks against Tiger Airways.”

“While we understand that we are intensifying the level of competition with our expansion across Asia, resorting to racial slurs is unbecoming and unnecessary.”

The Singapore-based airline added: “Tiger Airways is proud of our employees’ contributions regardless of their race or cultural background. Positions are determined by merit alone.

“In any case, we happen to have a great racial and cultural diversity across our board, management and the rest of the organisation.”

Mr Fernandes also described Tiger Airways, in which Singapore Airlines owns a stake, as an “odd” choice for a business ally for Thai as it was not making “much” money. The Singapore-based airline, he said, was also facing a pilot shortage. “They have not yet been able to solve their problems, so what are they going to teach the Thais?”

In its reply, which was sent to the media on Friday, Tiger Airways said: “Tiger Airways will continue to compete against all airlines in Asia and Australia. Together with Thai Airways, we will create a management team that is well qualified to lead Thai Tiger Airways, and repeat the success of Tiger Airways Singapore and Tiger Airways Australia.”

When contacted by

“I believe that Tiger’s management does not have a clear understanding of the Asian market,” he added.

[Western management does not even understand their own finances and economics at home]

wIll cOntamInated fUel

caUse  flyIng  plane  tO  CRASH

In  mId  aIr    ? ? ? ?

Tiger shares fell 3 cents, or 1.5 per cent, to $2.01 apiece yesterday.