, Singapore

Tiger Airways profits face erosion

Despite Tiger Airway's increase of 32% in sales, Phillip Securities expects profits to erode.

In particular, the soaring Jetfuel costs of US$106.5 could dampen profits of the company. The average Jetfuel price for the quarter which is US$98.9/bbl is 18% higher than the same period a year ago (US$83.6/bbl), according to Phillip Securities.

The negative effects would be reduced by the strengthening of SGD against USD. Consequently, Phillip Securities forecast pre-hedging fuel costs of S$65mn for the quarter. For the quarter, they expect a breakeven at profit before tax for Tiger Airways.

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