Fair warning, we are about to discuss a stock that I am short at the present time. Yes, I have decided to talk my book more openly, and I do not think it unethical. Skip this post if you are clinically incapable of independent thought.
Australia made shock headlines over the weekend by grounding Tiger’s domestic fleet, with the predictable reaction by analysts:
Australia made up about 50% of Tiger’s 2010 revenues, so it’s pretty significant news. The ban is only a few days long though, and CASA has 5 working days to file for an extension to the ban. Temasek and SIA are involved so there is a lot of political upside to the (ongoing) negotiations; however the frontpage commentary on today’s BT speculated on Tiger losing its license completely.
I also have a pet theory that entrenched interests in Australia – pilots’ union all the way …