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SINGAPORE: Budget carrier Tiger Airways has ruled out operating long-haul flights despite some of its rivals taking this route.
Tiger said operating long-distance flights are complex and costly.
Instead, it prefers to find growth opportunities in key markets like China and India.
The carrier will take delivery of at least four more planes this year which observers believe will serve those markets.
The first of those four planes is set to be delivered in September.
Rosalynn Tay, MD, Tiger Airways, said: “Passenger numbers have been growing strongly for Tiger Airways making it Singapore's biggest low cost carrier and the country's second biggest airline.>
In the 12 months to June 2010, Tiger carried over 5.3 million people, up more than 50 per cent compared with the year-ago period.
From July 2009 to June 2010, its average load factor - the percentage of seats sold - increased five percentage points to 85 per cent.
The strong numbers helped the airline win two top awards from Changi Airport including one for growth in passenger carriage in Singapore.
But Tiger said the growth ahead will not come from expanding into long-haul routes.
Ms Tay said: “We will not compromise on changing our business model. It is very easy to get distracted. It is very easy to say ‘why don't we do this and why don't we do that?’
“But what has made us very successful is the fact that we've stuck to our business model. If we were to start what some other people are doing, it will only add operational complexities and costs, so the answer is no to interlining, no to long haul."
Tiger's low-cost focus is a business model which investors seem to be backing.
Since its initial public offering in April, shares have risen by over 20 per cent to close at S$1.85 in Friday trade.
The market consensus target price is S$1.97 over the next 12 months.
Analysts said Tiger's growth will be fuelled by the expected rise in intra-Asia travel demand.
Tiger said it's gearing up to tap those opportunities with four new aircraft set to join its current fleet of 10 Airbus A320s.
Ms Tay said: “The opportunities in China and India continue to present themselves and all our routes are doing very well for us. So we will continue to look for more routes to these two countries and definitely look to up our frequencies as well."
Tiger currently operates 226 flights per week out of its base in Singapore's Changi Airport.
About 20 per cent of flights head to five Chinese cities and about 10 per cent ply four Indian destinations. - CNA/vm
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