Tiger Airways eyes hike in fuel surcharge

MANILA, Philippines - Budget airline Tiger Airways Philippines, formerly Southeast Asian Airlines Inc. (Seair), is seeking the approval of the Civil Aeronautics Board (CAB) to raise the fuel surcharge imposed on passengers of its three international routes.

Tiger Airways is looking at imposing an increase of between 60 percent and 90 percent for its flights to Singapore and Bangkok via the Clark International Airport in Pampanga and Kalibo International Airport in Aklan.

The low cost carrier is set to raise the fuel surcharge imposed on passengers of Clark to Singapore flights by 60 percent to P800 from P500 and on passengers of Clark to Bangkok flights by 70 percent to P850 from P500.

Tiger Airways is also imposing a 90 percent increase in its fuel surcharge imposed on passengers of Kalibo to Singapore flights that was launched last July 18.

The CAB allows airlines to impose fuel surcharge on international and domestic passengers as a temporary relief to help them recover losses arising from the increase in jet fuel prices in the world market.

Latest results of the Jet Fuel Price Monitor of the International Air Transportation Association (IATA) showed that the average price of jet fuel rose 4.5 percent to $123.5 per barrel from a year ago level nearing the full year target of $123.9 per barrel set by IATA.

Tiger Airways currently flies to Singapore, Bangkok, Hong Kong as well as local destinations including Clark, Laoag, Bacolod, Kalibo, Cebu, Iloilo, Tacloban, and Puerto Princesa via its hubs in Clark and Terminal 4 of the Ninoy Aquino International Airport (NAIA).

Tiger Airways, a unit of Singapore’s Tiger Airways, is undertaking a massive refleeting program as it initially intends to triple its revenues and increase its market share in the local aviation industry starting this year.

The budget airline intends to beef up its existing fleet of five aircraft consisting of two Airbus A320 and three A319 aircraft to 25 within the next three to five years. It intends to acquire at least three to four aircraft per year over the next three to five years.

Tiger Airways president and chief executive officer Olive Ramos said the airline sees its revenues tripling to P5 billion this year compared to last year due to the increasing number of airline passengers as shown by data from the Department of Tourism.

“Tiger Airways Philippines plans to increase its revenue forecast to P5 billion for 2013. This is three times higher than 2012. We are confident this growth can be supported by the bullish tourism targets of the DOT and the increasing number of travelers from wider segments of the society,” Ramos said.

She explained that this would translate to a higher market share of about five percent this year from three percent last year in the low cost carrier segment.

In August last year, Tiger Airways through wholly-owned subsidiary Roar Aviation II Pte Ltd acquired a 40 percent stake in SEAIR for a total consideration of $2.5 million. The investment in Seair is Tiger’s second joint venture after it acquired a 33 percent stake in Mandala Airlines in Indonesia.