Jetstar delivers a Singapore sling – Alan Joyce says that Tiger Airways is a joke

A report by Scott Rochfort in Business Day over the weekend says that Jetstar has dismissed Tiger Airways as a “joke”, despite the Singaporean carrier bolstering its planned entry into the Australian domestic market with one of the region’s largest orders for aircraft this year.

In a clear sign Tiger is looking to torpedo the cosy duopoly between Virgin Blue and the Qantas Group, the airline has placed an order for an extra 30 Airbus A320s to be delivered from 2011 and options to buy another 20.

Amid speculation Tiger could announce the Gold Coast as its first destination from its Melbourne base as soon as next week, Jetstar chief executive Alan Joyce on Friday launched his most blistering attack on the Singaporean airline to date. “Tiger and what they have done have come across as a joke, and will probably continue that way,” Mr Joyce told the Herald.

Aside from referring to the losses racked up by Tiger, Mr Joyce added: “They are really focused on losing money on all of the markets that they operate on. Tiger is a Singapore Government entity – they don’t really have a commercial bone in their body,” Mr Joyce said.

Tiger is directly and indirectly 38% owned by the Singapore Government’s Temasek investment vehicle, which has an 11% direct stake in Tiger and majority ownership of Singapore Airlines, which in turn has 49% of Tiger.

Despite labelling Tiger a “Singapore Government entity”, Jetstar and Qantas also have government links, with the Singapore-based Jetstar Asia happening to be 19% owned by Temasek.  Jetstar Asia’s CEO Chong Phit Lian is also a Temasek appointee.

Qantas also recently stitched up a deal with the Vietnamese Government to buy a 30% stake in Pacific Airlines.

But Mr Joyce denied that Jetstar’s plans to enter the Sydney-Brisbane route in December – and to boost its flights to the Gold Coast – had anything to do with Tiger, adding, “I think Virgin are our major competitor,” he said, noting Jetstar had recently lost market share on the route to Virgin Blue which had increased services.

As for Jetstar’s plans to enter the Sydney-Brisbane market, Mr Joyce said he was confident his airline would not cannibalise Qantas’s share of the market.

While Mr Joyce said it would have been a concern when Jetstar first launched three years ago, he said both Qantas and Jetstar had showed they could profitably coexist on the same route.

To ensure Jetstar does not cannibalise high-yielding business traffic, the two Sydney-Brisbane flights will be operated in the late morning and early afternoon.

Tiger CEO Tony Davis, meanwhile, said his airline was also looking at the possibility of operating on the Tasman and New Zealand domestic market, adding “We see tremendous growth opportunities across the network, both in South-East Asia and Australia.”

Despite Jetstar, Virgin Blue and Qantas all boosting their domestic fleets, Mr Davis said he believed there was huge demand for the cheaper airfares Tiger would offer. “There’s certainly a huge amount of demand from consumers for affordable airfares,” he said. “I don’t believe we’re going from feast to famine.”

As for Tiger’s routes, Mr Davis said: “I am not going to get drawn on the existing fleet plan because it’s exactly the kind of information our friends at Qantas headquarters would like to know.”

He said Mr Joyce’s comments on Tiger’s losses failed to mention Qantas’s Jetstar Asia operations were making triple the losses he was out of Singapore.

Report by The Mole and Business Day