Floundering Tigerair declawed by fierce regional budget carriers

It will cease to be an aviation player in the next couple of years.

Investors shouldn’t be too pleased with the fact that Tigerair managed to eke out its first profit in several quarters in its latest results.

According to CIMB, Tigerair will be kicked out of the cutthroat regional low cost carrier race because of its stagnant forecast capacity to the ASEAN, which stands in stark contrast to other carriers’ expansion plans.

Data from CIMB showed that between July 2014 and July 2015, the seat capacity from Singapore to ASEAN is expected to rise 8.8%, against Tigerair’s reduction of 1.2%.

Tigerair’s seat market share to between Singapore and ASEAN countries peaked at 12.9% in January 2014, but has since declined to 11.3% in January 2015, and is expected to fall further to 10.3% by July 2015.

Tigerair Singapore’s relatively stagnant forecast capacity to the ASEAN region of around 33,000 seats by July 2015 stands in marked contrast against other carriers’ expansion.

“TR’s seat capacity to Malaysia, Indonesia and the Philippines, trail substantially the market leaders AirAsia, Indonesia AirAsia, and Cebu Air, respectively. With TR planning to keep capacity stable for the next 1-2 years, its market share will continue to decline, so TR’s position as an ASEAN aviation player will likely slip irretrievably in the next few years,” stated CIMB.

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