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Tiger Airways Turns in Profit, Vows to Keep Fares Low

Singapore-listed low-cost carrier Tiger Airways swung to a net profit in the fiscal second quarter thanks to strong passenger growth and favorable exchange rates.

Tiger posted a net profit of S$14.1 million ($10.9 million) in the July-September quarter, reversing the S$2.3 million net loss a year earlier.

Airplane
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Airplane

Revenue climbed 35.4 percent to S$143.5 million ($111.4 million) from S$106 million the year before, the airline said in a statement.

"Revenues are up. Our revenue per ASK (available seat kilometers) is up. People are paying more for their tickets than they did last year," said Tony Davis, CEO of Tiger Airways in a CNBC interview.

The carrier, which delivered a load factor of 87 percent in the quarter, generated a substantial portion of its revenue from the Australia market, Davis said.

"Our revenue is predominately in the Australian and Singapore dollar. Both of those currencies are very strong at the moment," he added.

Tiger is planning to expand its fleet in Australia to 12 by the financial year-end, the statement said.

"We managed to get our cost down at the same time, so we are in a good position right now," Davis said.

Keeping Fares Low

The low-cost carrier, which is 34.4 percent owned by Singapore Airlines, said it aimed to boost ancillary revenues while keeping fares low.

"If you think about other industries like cinemas, most of their profit margins come from the softdrinks and popcorn they sell...not their ticket price," Davis said.

"What we are trying to do is push our entry prices lowest possible - get people through the door, make the admission price affordable to as many people here in Asia," he added.

"If we keep making the tickets more affordable, the sky is the limit," he said.

Tiger shares rose 2.7 percent to S$1.93 on Wednesday.