Roaring back into the domestic fare war ... Tiger Airways CEO Andrew David. Photo: Arsineh Houspian
In the battle for travellers’ hearts and minds, Tiger Airways boss Andrew David has coined a new phrase: “keeping the duopoly honest”.
That was one of the catchphrases wheeled out as Tiger opened a crew and aircraft base in Sydney yesterday to seriously tackle Australia’s biggest metropolitan market for the first time in its quest for long-term viability.
It means three more 180-seat jets will be put into the air in the next two months, while Virgin and Qantas also ramp up capacity by more than 20 per cent in what is turning into a bargain bazaar for domestic travellers.
The dominant Qantas is already reporting the damage to its bottom line from the capacity war for market share with Virgin. Now both of them will be watching Tiger’s unexpected recovery from its grounding a year ago.
For the first time since August last year, Tiger will soon have all 10 of its Australian A320s flying again, and David will soon be making presentations to his Singapore bosses for an increase in the Aussie fleet to accommodate growth.
Many analysts wrote off Tiger last year. It would be impossible, they argued, for Tiger to survive in the safety-conscious Australian market when it had broken the basic ground rules.
But the fact that Tiger didn’t cut and run back to Singapore – as I, for one, expected it to do – underlines the fact that Tiger’s main backer, Singapore Airlines (SIA), has deep pockets and wants to be in the Australian domestic market for the long haul.
SIA now has an extra reason to build a viable Tiger Airways in Australia with the launch of its low-cost long-haul subsidiary Scoot. SIA has spoken about the possibility that it will use Tiger (in which it holds a 33 per cent stake) as a feeder for Scoot, although Tiger in Australia has so far rejected that idea. It says its ultra-low-cost point-to-point model doesn’t work as a feeder for anyone, unlike Jetstar, which is prepared to be a feeder for Qantas on some routes.
“Yes, we've got a great low-cost base but you're never going to make any money if you don't sweat the assets, so that's first priority,” David told The Australian yesterday about Tiger’s need to get all of its planes back in the air. “The great thing with Singaporean shareholders is, of course, we've got to start making a profit, but they take a long-term view.”
Others were more blunt. “The Goliaths (Qantas and Virgin) are bleeding from self-inflicted wounds,” blogger Ben Sandilands wrote. “It doesn’t matter if they stop bleeding and charge the fares that restore their domestic profit margins, or if they continue to bleed. Either way, the patient Tiger wins.”
Tiger is basing planes in Sydney for the first time – something it once vowed it would never do because Sydney is the highest-cost capital city airport in Australia – and, by September, will be offering an extra 3600 seats a day into and out of the New South Wales capital.
Flights between Sydney and the Gold Coast, abandoned two years ago, resumed yesterday. Flights to Brisbane will follow and frequencies to Melbourne will also be boosted. More joining of the dots in Tiger’s network – from Sydney to Cairns and Perth, for example – are options for the future.
The big test for the carrier, however, will come in September. Once the most unreliable airline in the Australian skies, Tiger has become the most reliable, beating even Qantas, which has spent the past two years restoring its on-time performance.
In two months’ time, Tiger will be as busy as it was before the grounding, flying more than 60 sectors a day. The first thing that is likely to suffer is on-time reliability.
Just to be sure, the airline is importing an additional A320 as an “operational spare” to go in action if any of its planes becomes unserviceable or gets too far behind its schedule.
Have you flown Tiger? What was your experience? What do you think of Tiger's expansion plans? Are Qantas and Virgin still your preferred choices? To what extent are other factors having an impact on travel plans? Does the strong dollar mean you’re simply saving to go overseas?