Jetstar CEO laughs off threat imposed by Tiger Airways
A www.news.com.au report says that Jetstar CEO, Alan Joyce has laughed off the threat posed by Singapore owned Tiger Airways entering the Australian market, claiming that the low-cost carrier was already bleeding millions of dollars.
Speaking at the National Aviation Press Club in Sydney last week, Mr Joyce said Jetstar was, in fact, excited about Tiger’s introduction as it gave it an impetus for further expansion.
Tiger Airways will touch down in Australia later this year, promising single-digit fares on domestic routes as well as cheap connections through to its hub in Singapore.
Its introduction, combined with new Air AsiaX and Viva Macau services, is expected to significantly eat into the prosperity currently experienced by local low-cost carriers Jetstar and Virgin Blue.
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But Mr Joyce claimed his airline was already offering comparable fares on domestic routes and had room to move.
He said more than one million passengers had flown domestically on a fare less than $50, which plus taxes already equated to the single-digit fares promised by Tiger.
Unlike Tiger Airways boss Tony Davis, Mr Joyce said he was not confident of Tiger’s buoyancy in the Australian market. “Last month Mr Davis said Tiger ‘are in the profit-making business’ when announcing Melbourne as their Down Under operational base,” he said.
“Whilst Jetstar takes any new competitor seriously, one cannot help but think when Tiger’s first year of pre-tax profit will come. Their operations have and continue to lose money – over $60 million Singapore dollars in two years – and at a greater rate than Jetstar Asia to our estimation in their last financial year ending in March.”
The Jetstar CEO also spelled out the airline’s growth plans, which centred on rapid international expansion. In 2011, the airline plans to have 70 per cent of its operations dedicated to international markets, supported by its new Airbus 320s and Boeing 787s purchases.
Those new plans kicked off last week when Mr Joyce announced a doubling of Jetstar services into Bali.
Mr Joyce also used his speech to slam the Australian International Pilots Association for “peddling a negative image of Jetstar” and “denigrating our professionalism and standards”.
AIPA has long been critical of the Qantas group, claiming Jetstar’s increasing capacity was eroding Qantas’ reputation as the world’s best airline.
Report by The Mole
John Alwyn-Jones
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