Tiger reports a 23% increase in passengers for the month of May 2011
The news: For the month of May 2011, Tiger Airways reported carried 596k passengers, a 23% YoY increase from 486k. Average load factor has increased by 1ppt from 82% to 83%. On a month on month basis however, number of passengers carried fell 4.3% from 623k. Tony Davis noted that the growth reflected continued resilience in demand for their low cost product.
Our thoughts: Tiger is expecting a net nine new aircraft deliveries this financial year, all of which will be deployed into Asia. While both management of THAI Airways and Tiger Airways are still keen on their Thai-Tiger JV, the fate of the JV will only be known after the Thai elections. It has recently faced a roadblock in the Philippines after the CAB halted SEAIR's domestic routes following complaints filed by competitors that it may be in violation of cabotage laws. We maintain our neutral stance on the stock given current headwinds in its regional expansion and increasingly competitive environment in Australia. Our TP of S$1.40 is based on 12x our FY12F earnings.
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