INTERVIEW-Tiger Airways sees steady fuel hedge ratio

* Tiger Air to keep consistent fuel hedge ratio

* Plans to expand aircraft fleet

* Sees higher passenger volumes, jet fuel demand; no IPO

By Felicia Loo

SINGAPORE, Aug 19 (Reuters) - Tiger Airways, a budget
carrier partly owned by Singapore Airlines (SIAL.SI), is
keeping a consistent ratio of fuel hedging to safeguard against
wild swings in oil prices, a company executive said on Tuesday.

Tiger, based in Singapore and Australia, hedges at least a
third of its fuel needs, which will grow as the carrier expands
its fleet to 12 A320 aircrafts in 2008 from eight last year,
Chief Operating Officer Steve Burns told Reuters.

He declined to provide Tiger's jet fuel consumption level.

The sharp fall in oil prices to below $112 a barrel CLc1
from the record of $147.27 in mid-July -- though still 12
percent higher than the start of the year -- will not let the
airline let its guard down. "Tiger will not second guess the
market. We are not in the business to gamble. Hedging by nature
is a form of insurance and it doesn't necessarily guarantee
lower prices," the 33-year old Burns said.

Singapore Air hedges about 36 percent of its fuel needs at
an average price of $104-$109 a barrel, in line with its policy
to hedge between 30 and 60 percent.

But to keep themselves afloat, many regional airlines have
trimmed fuel hedging, betting on sustained price falls rather
than a rebound to new highs, analysts said. [ID:nSP182725]
[ID:nSP149894]

Ballooning fuel costs along with a slowing world economy,
may be a rough period for low-cost carriers like Tiger, with
some players in the market already threatened by insolvency.

Singapore jet fuel prices JET-SIN came down from records
of $181 a barrel in July, to $132 at Tuesday's close but well
above the $83 a barrel a year ago.

Under the current difficult conditions, Tiger is not
planning to make an initial public offering (IPO), repeating
its position in November. It had said in January last year that
it would be ready to raise funds for expansion by the end of
2007. "No, we don't plan to. Not in this current climate,"
Burns said.

OPTIMISM AMID THE GLOOM

The International Air Transport Association (IATA) had said
global air passenger traffic saw its slowest growth in five
years in June, and warned the situation would "get a lot
worse", predicting that airlines could lose $6.1 billion this
year.

But the Ireland-born Burns says "demand is still there and
Tiger will be as lean as possible".

Fuel demand will rise as Tiger now has more flight capacity
and forecast passenger volumes to hit 3.5 million this year, he
added. Tiger plans to expand its fleet sixfold to 72 by 2016.

Tiger now flies to 27 destinations across Asia Pacific and
procure jet fuel supplies via tenders all over the region.

"We have fuel contracts with our suppliers. The fuel bill
is large and it's in the hundreds of millions. We can't control
the market price of oil," Burns said.

Tiger booked S$37.8 million ($27 million) in net profit for
the year to March 2008, its first year in the black since its
launch in 2004.

Its passenger numbers grew 73.7 percent for April-June
versus a year ago, even as Asian full-fare carriers suffered
losses and are cutting flights. The group reported a S$14.3
million loss the previous year.
(Editing by Ramthan Hussain)