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SINGAPORE: The budget carrier Tiger Airways said it is bullish about the outlook for air travel in Asia. The comment came as it officially launched its initial public offering.
The share sale is valued at S$272 million. Tiger is offering 165 million shares at a maximum price of S$1.65 per share.
Only a small number of budget airline passengers flowed through the gates at Changi Airport five years ago. Now, those that fly budget number one-in-five and growing.
And Tiger Airways wants a bite of that lucrative market. It is looking to raise up to S$247 million in net proceeds to expand its fleet and presence in Asia.
It is offering about 165 million shares and expects to confirm the final price on January 18.
Tony Davis, CEO, Tiger Airways, said: "It's a good opportunity for us to expand our share holding base to raise more capital to enable us to grow and really make sure we put the company on a sound footing for the next stage of our development."
Tiger, which is 49 per cent owned by Singapore Airlines, will set aside about S$166 million to buy new aircraft.
Some S$50 million will go towards repaying short-term loans and S$20 million used for working capital.
The remaining S$10 million will fund its growth in Asia-Pacific where it is looking to establishing more bases.
The carrier said it's braving the struggling aviation market now to list because it's positioning for better times ahead.
Mr Tony Davis added: "I think the industry generally is very robust. I think what we are seeing is that air travel is a very component of economic activity. It's still the very lifeblood of economic trade. We are seeing huge steps forward of tourism here in Asia, so I continue to be bullish."
Tiger expects the Asian region to become the biggest travel market by 2020.
It is now looking to increase the number of flights on existing routes and start new routes between the airports it operates in Singapore and the Australian cities of Melbourne and Adelaide.
Shares of the carrier are expected to begin trading on January 22. - CNA/vm
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