Seng Lim 0 Report post Posted February 9, 2007 Tiger to tear up Aussie air market Scott Rochfort February 9, 2007 - 11:15AM Singapore Airlines backed Tiger Airways has announced its plans on becoming Australia's third domestic airline by late 2007, sparking expectations it will trigger the mother of all low-cost domestic airfare wars. In a sign Tiger is intent on smashing the cosy duopoly enjoyed between Virgin Blue and Qantas-Jetstar, its chief executive Tony Davis, said in a statement: "Fares are too high in Australia. We see the opportunity to deliver consistently low fares on all our routes.'' It is expected to take Tiger at least six months to receive an Air Operators Certificate to allow it to fly domestic flights. Mr Davis told smh.com.au Tiger would offer "single digit'' one-way fares for its domestic launch. The airline already offers $8 one-way fares from Darwin to Singapore and is currently advertising S$21.50 ($18) one way fares from Perth to Singapore for the launch of this service next month. Out of its homebase in Singapore, there is a joke around aviation circles that the airline at times can offer a ticket for the same price as a six pack of Tiger beer. The company has offered S$1 fares in the past. Tiger is yet to detail which cities it hopes to service. The airline is running a poll for Australians on its website, asking them where they would like to fly. "We're looking at the whole country. Our objective is volume. It's not yield,'' said Mr Davis. When asked to respond to Qantas deputy chief executive Peter Gregg's comments that Jetstar would continue to have the lowest costs for any Australian story, Mr Davis said: "Good Luck, good luck.'' "We are committed to having the lowest base in Australia and we are committed to having the lowest fares in Australia,'' he said. "Our business model is about sustainable low fares. It's in our DNA, it's what we do.'' Tiger's business model is loosely based on the Europe's largest low-cost airline RyanAir, whose founders helped set up the airline. "Our business model is that we give consumers the lowest possible airfares.'' "Australians love our model and are supporting it already in their thousands. We are now keen to extend that model to the overpriced domestic market,'' said Mr Davis referring to the success of Tiger's services into Darwin. The airline was established in 2004 by Singapore Airlines, the founders of Irelands's Ryanair and a private equity form Indigo Partners to tap into the fast growing South East Asian low cost airline market. The airline hopes to fly five A320s domestically this year, and employ 1000 staff "both direct and indirect'' in Australia. Tiger is also expected to test the nerves of unions, given signs it could seek individual workplace agreement. When asked if Tiger would seek to establish union endorsed enterprise bargaining agreement, Mr Davis said: "It's up to the employees.'' "Our staff are incentivised and we have remuneration packages that reward the high efficiency levels we get from our business.'' Tiger is already advertising for Australian-based pilots, cabin crew and engineers on its web site. Unlike failed previous airline's such as OzJet and Compass, Tiger Airways has the backing of Singapore Airlines. Tiger insists it runs independently from Singapore Air - its 49 per cent shareholder. The move echoes Qantas's attempts to crack the South East Asian airline market by establishing a Jetstar Asia franchise in Singapore in late 2004. The 44.5 per cent Qantas-owned airline has racked up an estimated $100 million in losses with its other Singapore subsidiary Valuair, and has never appeared to be a serious threat to Singapore Air or Tiger Airways. Qantas chief financial officer and Jetstar Asia chairman Peter Gregg rejected suggestions Qantas was about it quit its Singapore investment yesterday. Mr Gregg also hit out at a report in the Herald which mentioned the large number of flight cancellations on the airline, and its ongoing losses. "It is ridiculous to equate a number of operational cancellations - which are in the process of being resolved - and a claim about pilot shortages, with concerns over the airline's future, as some media reports today have done,'' he said. He said Jetstar Asia made its first profit in December. He said January however was a quiet month. Link : http://www.smh.com.au/news/business/tiger-...ge#contentSwap1 Share this post Link to post Share on other sites
Keith T 2 Report post Posted February 9, 2007 I shall look forward to lower QF fares! Share this post Link to post Share on other sites
Peter Smith 1 Report post Posted February 9, 2007 Tony Davis, sits on the board of Advent, the major stakeholder in Skywest. Talk about town, is they will use the XR platform to start their services out of PER initially, which is fantastic news and about time we had a real low cost carrier flood the market. Best of luck to them, and with connections to Singapore and beyond out of PER and DRW, its a recipe for success! Share this post Link to post Share on other sites
Keith T 2 Report post Posted February 9, 2007 Tony Davis, sits on the board of Advent, the major stakeholder in Skywest. Talk about town, is they will use the XR platform to start their services out of PER initially, which is fantastic news and about time we had a real low cost carrier flood the market. Best of luck to them, and with connections to Singapore and beyond out of PER and DRW, its a recipe for success! I hope they will significantly increase competition on the transcon flights. Share this post Link to post Share on other sites
Peter Smith 1 Report post Posted February 9, 2007 The gov't as you probably know are looking at passing a bill that allows 5th freedom rights to international carriers to operate transcon flights in Australia, as PER gets shafted big time when it comes to air travel. SQ are hitting the nail on the head, by now pressing the gov't for rights to do just that. Share this post Link to post Share on other sites
BC Tam 2 Report post Posted February 9, 2007 (edited) Tiger to tear up Aussie air market Scott Rochfort February 9, 2007 - 11:15AM ..... that the airline at times can offer a ticket for the same price as a six pack of Tiger beer. The company has offered S$1 fares in the past. Link : http://www.smh.com.au/news/business/tiger-...ge#contentSwap1 What the heck - S$1 for a six pack Tiger, time to pay SIN a visit again I say !! Edited February 9, 2007 by BC Tam Share this post Link to post Share on other sites
Keith T 2 Report post Posted February 9, 2007 (edited) Nope, won't be a joint venture with Skywest. http://www.smh.com.au/news/business/tiger-...0524239938.html Tiger, however, shot down media reports it could form a partnership with the Perth-based Skywest Airlines. "It is not Tiger Airways' general policy to comment on press speculation but the company can confirm that it is not in any form of discussions with Skywest or its holding company Advent Air," the airline said in a statement. I reckon they'd set up Tiger Airways Australia or something, in collaboration with local investors (since such an entity has to be 51% Australian-owned). Edited February 9, 2007 by Keith T Share this post Link to post Share on other sites
Seng Lim 0 Report post Posted February 9, 2007 What the heck - S$1 for a six pack Tiger, time to pay SIN a visit again I say !! Alcohol in Singapore is pretty expensive, similar with Malaysia. SGD$1 definitely can't get you a can of Tiger beer. I guess they refer to SGD$1++ (taxes and surcharge) and the final nett price is equivalent to the price of 6 pack Tiger beer. Share this post Link to post Share on other sites
BC Tam 2 Report post Posted February 9, 2007 Alcohol in Singapore is pretty expensive, similar with Malaysia. SGD$1 definitely can't get you a can of Tiger beer. I guess they refer to SGD$1++ (taxes and surcharge) and the final nett price is equivalent to the price of 6 pack Tiger beer. Drat, drat and triple drat ! Share this post Link to post Share on other sites
