Budget Carrier Tiger Airways Plans February Listing

Singapore. Tiger Airways, the budget carrier part-owned by Singapore Airlines, may raise about 200 million Singapore dollars ($143 million) in an initial public offering, according to a pre-marketing document.

Tiger may lodge offer filings with the Singapore stock exchange as early as Monday, according to two people familiar with the move.

The low-fare airline is expected to base its share sale on financial forecasts that include posting a net income of 61 million Singapore dollars in the year ending March 2011, and then of 79 million Singapore dollars the year after, according to the document.

The timing of the IPO is “better” now, with air travel beginning to pick up after the global recession plunged airlines globally into losses, said Rohan Suppiah, an analyst at Kim Eng Securities.

“The broader market is picking up, we’re seeing higher loads, and air travel is starting to improve,” Suppiah said.

Tiger Air has yet to make any decision on an IPO, spokesman Charles Sng said. It is an option that shareholders may consider, he added.

The carrier aims to price the shares in mid-January and plans for a listing in February, one of the people said. The initial share sale will value Tiger, which began flying in September 2004, at between 725 million Singapore dollars and 910 million, according to pre-IPO the document.

AirAsia, the only discount carrier in Southeast Asia that is publicly traded, is valued at 3.64 billion ringgit ($1.1 billion). The Malaysia-based airline, Southeast Asia’s biggest low-fare airline, raised 505.4 million ringgit in September in a private placement of shares aimed at cutting debt.

Airlines globally may post $11 billion of losses this year, according to the International Air Transport Association.

The losses may shrink by half to about $5.6 billion next year, the group said. Passenger demand, after a decline of 4.1 percent in 2009, may grow by 4.5 percent in 2010 as the industry rebounds from the recession.

The Tiger group had accumulated losses of 127 million Singapore dollars and negative equity of 107 million Singapore dollars by the end of Sept. 30, 2009, according to the document. Tiger, Jetstar Asia and other discount carriers have doubled their market share in Asia since 2005 by winning passengers from flag carriers. At least 20 low-fare airlines have started in the continent since 2000.

Singapore Air, the world’s second-largest airline by market value, owns 49 percent of Tiger. Temasek Holdings, a Singapore government-owned investment company, owns 11 percent.

Tiger has 17 aircraft in operation and another 14 to 17 to be delivered over the next two to three years, according to the pre-marketing document. The average age of its fleet was about 2.2 years in October, it said.



Bloomberg

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