Tiger Airways seeks alliances to boost sales outside Singapore

Tiger Airways Holdings, a low- cost carrier partly owned by Singapore Airlines, said it seeks to boost overseas revenue by forging alliances with other airlines.

The carrier plans to focus initially on filling its planes with passengers, and then on improving yields through partnerships to raise earnings, Chief Executive Officer Lee Lik Hsin told reporters in a conference call in Singapore today.

“We want to try to increase the overseas revenue contribution to our revenue base,” said Lee, who became CEO in May. “We need to market ourselves more like a network carrier rather than a point-to-point carrier. In order to grow and grow profitably, we need to expand beyond that.”

Tiger Air has grounded planes, canceled aircraft orders and exited overseas joint ventures as part of a restructuring after posting losses for three consecutive annual periods. The efforts are symptomatic of the challenges budget airlines face in Southeast Asia, where competition among half a dozen carriers has pushed fares down.

The airline is also looking at reducing flights to destinations where demand has weakened, Lee said. It’s waiting for approval from authorities to strengthen the company’s partnership with Scoot, the long-haul budget carrier of Singapore Air, he said.

Tiger Air’s loss widened to $65.2 million in the quarter ended June from $32.8 million a year earlier because of costs incurred from closing its Indonesia venture and Australia operations.

“Much of the issues and much of drain came from some of these joint ventures which we were not able to make work,” Lee said. “With the exit from these joint ventures, everyone in the company is feeling confident that we are in a good position.”

SEATS, CAPACITY

The airline filled 84.7% of its seats in the quarter, compared with 83.9% a year earlier. Capacity is expected to remain flat this year, the company said without elaboration.

Tiger Air is considering options to place out four aircraft returned after its Indonesia venture closed earlier this month, Lee said. The company said earlier this year it plans to ground eight aircraft in the 12 months ending March.