Tigerair buys 37 Airbus A320neo, option for 13 more

Singapore budget carrier Tigerair said 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 percent 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 and 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 and Whitney engines and the large "sharklet" wing-tips would deliver 15 percent 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".