Tigerair Taiwan (6757.TW) officially relisted on the general board on the 29th. The stock price rose to 81 yuan in early trading, an increase of 4.5%. The stock price broke through the 80 yuan mark for the first time, setting a record high, and firmly ranked as the king of aviation stocks.
Tigerair Taiwan, the country's only low-cost airline, held a pre-listing performance conference on the 5th and is expected to change its listing from the innovative version to the general version in 2024. Chen Hanming, chairman of Tigerair Taiwan, praised the team for achieving last year's promise to launch a new edition and delivering outstanding results this year. Cumulative revenue from January to September 2024 exceeded 12.6 billion yuan, exceeding 2023. The annual revenue reached approximately 12.47 billion yuan, a record high in ten years. In terms of gross profit, operating net profit margin, and net profit margin, it is also better than Taiwanese aviation companies such as EVA Airways, China Airlines, and Starlux Airlines.
"We have no reason to be optimistic about next year!" said Zhang Mingwei, general manager of Tigerair Taiwan. Currently, 88% of Tigerair Taiwan's ticket revenue comes from Japan and South Korea routes, with Japan accounting for 78%. Ticket revenue accounts for 80% of Tigerair Taiwan's revenue. The increase in fares and traffic volume on these routes is the driving force for the performance increase in 2024, and it also allows The outlook for 2025 is promising. He said frankly that he originally expected that the demand for Taiwanese to go to Japan this year might slow down and air ticket prices might drop. However, the ticket price from January to September 2024 will remain at around 5,500 yuan compared with the same period in 2023. "The recent travel exhibition has ended, and internal calculations for 2025 Ticket prices sold also increased by 1.3%."
Fares remain unchanged and demand continues to grow. This is attributed to the unblocking of Taiwan's borders in October 2022. Tigerair Taiwan has actively expanded its destinations in Japan and South Korea, with 6 new destinations in Japan and 4 in South Korea, driving demand from Taiwanese and Japanese tourists.
The number of passengers taking Tigerair to Japan in 2024 is estimated to be 6.59 million and 1.47 million to South Korea, both exceeding the number in 2019 before the epidemic. Zhang Mingwei mentioned that financial institutions have analyzed that the exchange rate of the Japanese yen against the Taiwan dollar continues to depreciate, and coupled with the Korean drama, the demand for Northeast Asia routes is still strong. In 2025, Tigerair Taiwan's passenger load factor is expected to reach 90%. Looking forward to 2025, the number of Tigerair Taiwan flights will grow by 22%.
With excellent operating performance, earnings per share in the first three quarters of 2024 will reach 5.52 yuan. Chen Hanming said: "Tigerair Taiwan will distribute dividends next year (2025)!" StarLux Airlines, which was recently listed, said that it will not be distributed until 2026 at the earliest, which is a year early.
With the most routes (28) from Taiwan to Japan and South Korea plus 9 independent routes, Tigerair Taiwan has created a competitive advantage at this stage. According to statistics from the Civil Aviation Administration of Taiwan, Tigerair accounted for 24% of the proportion of Taiwanese taking low-cost airlines from January to August 2024, surpassing Peach Air at 11% and Scoot at 10%.
In 2025, we will expand passenger sources from Japan and South Korea, and promote Taichung and Kaohsiung routes to welcome business opportunities in southern Taiwan.
So what are the growth drivers for Tigerair Taiwan in the next stage?
Zhang Mingwei pointed out that the short-term goal (2024-2026) is to expand the number of passengers from Japan and South Korea to Taiwan, increase routes to Kaohsiung and Taichung, and focus on the development of routes in Vietnam and Thailand. In 2023, Chen Hanming said that frequent flights from Taiwan to Japan were full, but it was difficult for the return flight from Japan to Taiwan to be full because the number of Japanese tourists traveling to Taiwan had not yet returned to pre-epidemic levels.
This year, Tigerair Taiwan has strengthened its marketing efforts in Japan, hiring Japanese actress Rio Uchida as its brand ambassador, and advertising on 5 destinations including Osaka, Okayama, and Kochi. In 2024, the number of passengers visiting Taiwan will reach 70% of the pre-epidemic number, and by 2025 Hope they all recover. These marketing models will also be introduced to South Korea in 2025.
In addition, as Taiwan's economic center moves from north to south, including: TSMC and other technology manufacturers invest in the south, Tigerair Taiwan has seen the demand from Taiwanese businessmen in central and southern Taiwan for business trips to Southeast Asia, and will add routes between Taichung and Kaohsiung. Kaohsiung in 2019 Routes account for 14%, and now it has gradually increased to 22%. "And for flights to Japan, Kaohsiung air tickets are more expensive than Taoyuan."
Tigerair Taiwan's mid- to long-term planning: targeting the economic boom in Southeast Asia and assessing business opportunities in the transit market
In addition to the short-term operational focus, Chen Hanming also shared Tigerair Taiwan's mid- to long-term (2027-2029) plan to start operating transit passengers in Southeast Asia. He hopes that Thai and Vietnamese passengers can transfer to Taiwan and then fly to Northeast Asia, allowing Tigerair Taiwan to operate in Southeast Asia. Japan's advantages in multiple destinations can be leveraged to create the next growth curve.
Chen Hanming said that in 2025, the team will start research and discuss relevant plans with travel agencies, possibly starting with a "Taiwan and Japan" package travel itinerary. He observed that as the economies of Vietnam and Thailand gradually take off, tourism demand will also increase.
As for when Tigerair Taiwan will become a transit station, meaning it will operate routes from Southeast Asia to Taiwan and then to Northeast Asia, accepting more Southeast Asian passengers and expanding its operational territory? Zhang Mingwei believes that this requires long-term planning, which involves issues such as the system grafting of various airlines, flight times and personnel coordination. Each project is a cost, and it requires a complete benefit assessment.
As for the long-term development after 2030, Zhang Mingwei revealed that he will consider the business opportunities of medium and long-haul routes of more than 4 hours. Currently, Tigerair Taiwan mainly operates 4-hour regional routes. He will also observe the business opportunities of AirAsia, Jetstar and other peers. To improve operating efficiency, we are considering arranging destinations outside Asia.
