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SINGAPORE - Even as Australia's air safety regulator is seeking to keep Tiger Airways grounded until Aug 1, the troubled carrier is being asked to repay A$2.25 million (S$3 million) it received from the South Australian (SA) government to base some planes in Adelaide.
The Australian Associated Press reported yesterday that SA Industry and Trade Minister Tom Koutsantonis told the state Parliament that the airline was given the sum under an agreement to initially base two planes in SA and later increase that to four.
But he said the airline had contacted the state government this year seeking to reduce the number of planes to one from August this year. It asked for a variation of its contract with the SA government, which the minister said was refused.
Australia's Civil Aviation Safety Authority said yesterday it has applied for a court order to extend the suspension as it is yet to complete investigations. Services had been due to resume on Saturday.
In a statement, Tiger said that it " remains committed to resuming services as quickly as possible" and " will refund fares to those passengers holding reservations between now and July 31" .
It also announced that its Australia CEO, Mr Crawford Rix, will leave at the end of this month. Mr Rix will be replaced by Mr Tony Davis, the group president and CEO of the airline's parent company, Tiger Airways Holdings.
Analysts said the loss of revenue will impact negatively on the stock price of the Singapore mainboard-listed low-cost carrier. Yesterday, its share price closed flat at S$1.04.
DMG & Partners research analyst Melissa Yeap said: " Last year it made S$279 million in revenue from Australia, that is 45 per cent of total revenue of S$622m. Impact will be significant to overall group revenue."
Standard and Poor's aviation analyst Shukor Yusof said the carrier will have to revaluate its business, " whether they should or should not stay in Australia" .
Said Mr Yusof: " There is a tipping point where they will say they have to get out, and the point is not there yet."
Tiger Airways.
Maintain TRADING SELL, lower TP to S$0.71 (from S$0.92).
CASA announced in a statement last night that it will seek an extension to Tiger Australia's suspension until 1 Aug 2011. While this will hit Tiger's bottomline by S$8m, we see further financial impacts in the longer-term. Our FY12/13 forecasts are lowered by 27.3%/21.9% but our FY14 estimate is retained. Accordingly, we slash our target price by 22.8% to S$0.71. However, in the latest turn of events, Tiger has appointed Chin Yau Seng as Acting Group CEO and Tony Davis has replaced Crawford Rix as Tiger Australia MD, possibly a move to appease Australian regulators. We are very positive on this development and a turnaround for Tiger could be underway.
Latest news from : www.casa.gov.au
CASA is applying to the Federal Court to extend the suspension of Tiger Airways Australia until 1 August.
If CASA completes its investigations and determinations before 1 August 2011 and is satisfied Tiger Airways Australia no longer poses a serious and imminent risk to air safety it may be possible for it to resume operations earlier.
The suspension of Tiger Airways Australia’s operations remains in place until either the Federal Court refuses CASA’s application or CASA withdraws it.
CASA is making the application to the Court because investigations into Tiger Airways Australia will not be completed by the end of the initial five working day suspension period.
CASA suspended Tiger Airways Australia’s operations on 2 July 2011 because it believed permitting the airline to continue to fly posed a serious and imminent risk to air safety.
Media contact: Peter Gibson Mobile: 0419 296 446
no fire sale. everything is going fine.
cheers.
| Jul 06 2011 | 11:08:27 PM |
COMPANY STATEMENT
Singapore, 6 July 2011. Tiger Airways Holdings Limited makes the following announcement regarding
Tiger Airways Australia Pty Limited (“Tiger Airways Australia”).
Tiger Airways Australia understands that the Civil Aviation Safety Authority of Australia (“CASA”)
intends to file an application in the Federal Court on 7 July 2011 seeking an extension to the period
for suspension of flights until 31 July 2011.
Tiger Airways Australia has been working constructively with CASA for the past five days to establish
a plan for the resumption of our services and will not oppose the period of extension. Tiger Airways
Australia remains committed to resuming services as quickly as possible.
As a consequence, Tiger Airways Australia will refund fares to those passengers holding reservations
between now and 31 July 2011. Tiger Airways Australia offers its sincerest apologies for any
inconvenience caused.
Tiger Airways Holdings Limited also announces the following management changes:
• The current Chief Executive Officer of Tiger Airways Australia, Mr. Crawford Rix, will leave the
airline on 31 July 2011. The Company will be appointing Mr. Tony Davis to the role of Chief
Executive Officer, Tiger Airways Australia. Mr. Davis will continue to serve as a Director of
Tiger Airways Holdings Limited.
• Mr. Chin Yau Seng, Executive Director of Tiger Airways Holdings Limited will be appointed as
Acting Chief Executive Officer.
hlfoo2010 ( Date: 06-Jul-2011 23:08) Posted:
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I think better not to jump into conclusion too fast .
Something i still dont understand why CEO sell so many shares and CEO AU leaving soon and now grounded.
Good news now is that Mr JY Pillay is now onboard, as an independent Director, with immediate effect takes over as non-executive Chairman. I think he will solve the problems fast.
I think this is a very serious mistake for neglecting the safety standard of running a Air tpt company. This might have long term effect of running the business.. Short term may be affecting its share prices badly...I think is better to stay away for the time being...
Jackpot2010 ( Date: 06-Jul-2011 22:41) Posted:
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You should worry now that Australia plans to ground TigerAir until 1 Aug 2011.
There would be more Sell Down tomorrow.
derekchong ( Date: 06-Jul-2011 21:51) Posted:
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no worry, Temasek just sold some bank shares in China and cash rich now,
can buy more Tiger Air shares. Dun anyhow short tomorrow hor.
Change of director?
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_E827BBE16170F173482578C50044D6B9/$file/ChangesToTheBoard.060711.pdf?openelement
tankuku ( Date: 06-Jul-2011 16:53) Posted:
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nickyng ( Date: 06-Jul-2011 20:50) Posted:
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