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Brokers' Take: OCBC keeps 'sell' call on Tiger Airways

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OCBC Investment Research on Thursday maintained its "sell" call on Tiger Airways, saying that it is too early to see any material impact from its alliance with Scoot. OCBC left its fair value estimate for the budget airline at 18 Singapore cents a share.

OCBC Investment Research on Thursday maintained its "sell" call on Tiger Airways, saying that it is too early to see any material impact from its alliance with Scoot. OCBC left its fair value estimate for the budget airline at 18 Singapore cents a share.

At 3.40pm on Thursday, the shares of the budget carrier were trading at around 25.5 Singapore cents apiece, down half a cent.

This follows Wednesday's announcement that Scoot and Tiger Airways are looking to deepen their partnership, having already seen a doubling of passengers connecting between the two airlines since they were granted anti-trust immunity in August last year.

Said the OCBC research note: "While the data is encouraging, we note that in August 2014, the two airlines were offering a total of more than 450 weekly flights and as at November 2014, the connecting traffic between them was still only less than 5 per cent. The base figure of connecting flights between these two airlines was small to begin with.

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Market voices on:

"That being said, we still think this is a huge step for the alliance and is certainly positive for Tiger Airways to execute its turnaround strategy. However, we believe the earliest we can see material impact from the alliance could be until at least H2 FY2016 onwards."

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