Despite trimming its operational loss in the first quarter, Tiger Airways warned it would take some time to turn a profit as a result of increased competition from other airlines.
The Australian operation trimmed its losses to S$21million (A$16million) in the three months to 30 June, from S$23 million previously, due to an 11 percent increase in yields, Brisbane Times reported
Tiger Airways chief executive Andrew David confirmed that yields would drop during the next six months due to an increase in capacity from Qantas, Virgin and Jetstar, that would push the carrier to reduce fares to remain competitive.
We may see a drop in profitability, but our competitors are going to feel it as well, Mr David said.
Currently the airline is awaiting a response from the Civil Safety Aviation Authority to have all flight restrictions removed, once approved the carrier plans to be operating 64 sectors per day by October this year.
Once the airline has returned to full service, the routes to have the biggest increase in seat capacity include Sydney to Melbourne and Melbourne to Hobart.
All the capacity going into the market means there is pressure on prices, and everybody is feeling that, and everybody will feel it for the next six months, Mr David said.
But we are rebuilding a brand and if we do the basics well, we will work our way through this and the capacity pressure will come off eventually.
Source = e-Travel Blackboard: S.P.