DMG has started Tiger Airways (J7X.SG) at Buy with $2.45 target price, based on industry average P/E of 18.3x, says Dow Jones.

DMG expects strong earnings growth on aggressive capacity expansion backed by high passenger traffic growth in Asia Pacific region.

Says budget carrier has one of lowest cost structures among peers, allowing it to price fares aggressively.

Tips earnings growth of 151% in FY11, 48% in FY12.

Notes airline plans to expand fleet to 68 planes from 19 by end-2015, set up third base in Asia Pacific (outside Singapore, Australia) by March next year.

“We view this upcoming new development positively as Tiger has had an impressive track record of achieving profitability for its airlines within three years.”

Shares +0.5% at $1.83.