The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to recent developments in the travel sector.

Tiger Airway’s order for 37 Airbus’ A320 neo single aisle model will see the carrier pay $3.8 billion with delivery of the aircraft planned for between 2018 and 2025 with a manufacturer’s discounts on list prices part of the deal. Tiger also has the option to further increase the order with an additional 13 aircraft and convert to larger models at the same discounted prices.

With Tiger Air canceling its existing aircraft order with the French Airbus for nine of the newer A320s powered by Pratt & Whitney engines, the budget carrier hopes to save around $31 million annually on fuel costs as a surge in demand for low cost air services in the Southeast Asian region has compelled other budget airlines to significantly increase fleet numbers and routes offered.

“Tiger has had perhaps the worst year for an Airline anywhere in the world even with all of the advances being made by rivals and peers the company has retreated some 20% in value, hopefully with this change in long term policy we will start to see the carrier claw back some of these losses amid a greatly renewed market for their services in the region,” said a Senior Analyst and Researcher at The Avanti Group.

The budget airlines shares rose 1.2% to S$0.41 on news of the new order of aircraft, having seen its stock fall 20% in 2014 compared with only a slight 2.1% decline in Singapore’s benchmark Straits Times Index, bringing the budget air carrier’s return on investment to negative 38.47% for the year to date.

“The gains made by Tiger following the announcement of their new arrangement with Airbus may seem minor, but when viewed in context of the last 12 months for the company represent a lot of confidence that the right decisions are at last being made so far as long term strategy is involved. The company’s shares are not going to enjoy any dramatic upswings but we are confident they will regain their lost value of a 24 month long period if conditions remain stable,” concluded the Senior Analyst and Researcher at The Avanti Group.

The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.