http://www.news.com.au/heraldsun/story/0,21985,25635708-664,00.html
Heraldsun.com.au, 15 Jun 2009, Geoff Easdown
TIGER airlines chief Tony Davis says the low cost carrier's local
operations are throwing off
enough cash to give it confidence to continue its
push into the Australian market.
But he admits Tiger is not yet
profitable and declines to say when there will be black ink on the
airline's balance sheet.
"We are not breaking even yet,
but the key thing for us is that we have demonstrated that the
business is cashflow positive," he told
BusinessDaily in a phone interview from Singapore.
"We are generating enough cash from our Australian operations to
give us confidence to keep running the business.
"We haven't had to go to our shareholders for funds. And that
indicates the business is generating enough cash."
Mr Davis acknowledged how tough the market had been since Tiger
launched 18 months ago in Australia.
Record fuel prices and customer flack caused by poor client
relations have not helped the company's image.
A decision to keep Tiger's
call centre staff on hard-to-reach telephone lines in Singapore
proved disastrous.
"Some of the cost assumptions we put together were clearly wrong,"
Mr Davis said.
"What we have done now is to put more services into
Australia."
Tiger will soon include daily services from Melbourne and Adelaide
to Sydney.
The airline has also chosen to have the heavy engineering checks on
its fleet of six A320 commuter jets carried out in Melbourne,
whereas it would have been done at low-cost engineering workshops
in Asia.
"And, we have also shifted customer relations into Australia," Mr
Davis said.
However he became defensive when
asked why Tiger's recently issued full-year traffic results were
written in percentages and not hard numbers.
"What we are not going to do is to lay out in graphic detail
exactly how well we are doing and what routes are performing best,"
Mr Davis said.
"That would allow Qantas and Virgin Blue to start picking our
business to pieces."
While Tiger's results for Asia
and Australia show full-year seat capacity soared 43.1 per cent and
that gross revenue was up 25 per cent during the past year, no one
knows how these percentages translated to real
earnings.
Tiger is a privately owned joint venture between Singapore
Airlines, Irish-based discounter RyanAir with a third party US
investor and, therefore, is not obliged to make its accounts
public.
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