* Ex-CEO of SIA's regional carrier to be acting chief
* Tony Davis to head troubled Australian operation
* Shares dropped as much as 4.3 pct on Thursday
(Adds analyst comments, background)
SINGAPORE, July 7 (Reuters) - Singapore-listed Tiger Airways
Holdings has appointed Chin Yau Seng as the acting
chief executive officer for the budget carrier after current CEO
Tony Davis was handed over day-to-day running of the troubled
Australian operations.
Australia's air safety regulator said on Wednesday it would
seek a court order to keep Tiger Airways grounded in
the country until Aug. 1 due to ongoing safety concerns.
The carrier must now consider its options of scaling down
its Australian operation or even exiting the business as the
suspension has severely damaged its brand reputation, Citigroup
said in a note.
"Tiger will now have to weigh its options of either
continuing to base its fleet in Australia and face the
uncertainty over when it can resume operations but lose S$2
million per week, or scale down its operations in Australia and
exit the business," Citi's analyst Rigan Wong said in the note.
Davis, the group President and CEO of the airline's parent
company, Tiger Airways Holdings Ltd, will be appointed CEO of
the troubled Tiger Airways Australia, replacing Crawford Rix,
who would leave the company by the end of the month.
Tiger said Davis will still serve as director at Tiger
Airways Holdings.
Chin Yau Seng was the former chief executive of SilkAir, the
regional carrier of Singapore Airlines (SIA). SIA owns about a
third of Tiger but is not involved in the operations of the
budget carrier.
Australia stopped Tiger's local flights on safety grounds on
July 2, the first time a carrier's entire fleet has been
grounded in the country, and has been meeting with airline
officials to discuss its concerns.
Singapore brokerage DMG & Partners has cut its target price
for Singapore budget carrier Tiger Airways to S$0.76
from S$0.91 and kept its sell rating, partly citing potential
loss from the Australian problem.
DMG estimates Tiger will incur direct losses of S$32 million
due to the Australian ban and has cut its earnings forecast for
the airline by 66 percent for fiscal 2012 and 50 percent for
2013.
"There could be further downside risks to earnings from
higher operational costs in terms of staff costs and higher
marketing costs in an attempt to repair its reputation," said
DMG in a report.
Tiger Airways generated 45 percent of its S$622 million
($506.0 million) revenue in 2011 financial year from Australian
operation.
The carrier went public in January 2010 and the initial
public offering was sponsored by Citigroup and Morgan
Stanley .
Tiger's share price has dropped by about 16 percent since
the Australian regulators imposed the ban on its operations. It
fell by as much as 4.3 percent on Thursday to S$1, compared to
the IPO price of S$1.50.
($1 = 1.228 Singapore Dollars
