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Tigerair purchases 37 Airbus A320neo, option for 13 more

Singapore budget carrier Tigerair said on Monday it will buy 37 Airbus A320neo planes valued at $3.8 billion, enabling the airline to cut fuel costs and fly to new, more distant destinations.

Tigerair, which is 40 per cent owned by Singapore Airlines, said in a statement it also has the option to buy up to 13 additional aircraft and to convert the A320neo planes to the bigger A321neo model.

Delivery of the fuel-efficient planes will start from 2018 through to 2025, the airline said in a statement.

As part of the deal, Tigerair’s existing order for nine A320s, which were part of a bigger 2007 order, will be cancelled. The planes were to have been delivered this year and in 2015.

The statement said the planes will be powered by Pratt & Whitney’s PW1100G-JM engines.

The carrier said the A320neo, which will replace the A320ceo, has a longer flight range “which will enable Tigerair to fly to new and promising destinations”.

It also said the combination of the Pratt & Whitney engines and the large “sharklet” wing-tips would deliver 15 per cent greater fuel efficiency compared with the current generation of the A320ceo.

“This translates into an estimated Sg$40 million in savings annually, based on the current fleet’s fuel expenditure,” Tigerair said.

The new orders come after the airline reported a net loss of Sg$118.5 million ($93 million) for the three months ended December 2013, owing to tough competition in Asia’s budget carrier sector.

“We have re-calibrated our strategy and taken the necessary steps to reposition Tigerair for a brighter future,” said Tigerair Group chief executive Koay Peng Yen.

“This deal effectively dissipates some concerns over a potential capacity overhang in the next couple of years. It also allows us to continue building on our leadership position in budget travel at a measured pace.”

The carrier said that although the deal is valued at $3.8 billion based on catalogue prices, the negotiated price “was significantly lower”.