Ryanair by another name?
In an interview with Tiger Airways CEO, Tony Davies in Sydney last week it became very clear that domestic aviation in Australia is up for one mighty shake up with Davies making it very clear that Tiger Airways was not about yield but volume and to achieve that volume they would deliver prices that Australia has never seen before, including launch fares in the region of $10.
With Tiger’s business model based on Europe’s highly successful low air fares leader Ryanair and Dab vies having launched bmi baby, it appears that in many ways, Tiger Airways could well be Ryanair by another name, with Ryanair, credited with being at the forefront of the low cost carrier revolution in air travel in Europe
Davies also said that the reality was that there was not a true LCC in Australia with those proclaiming to be, namely Virgin Blue and Jetstar both offering fares much higher than those that will be offered by Tiger and also operating on a much higher cost base that Tiger with a range of additional non core activities that increased their costs, an area Tiger would not be going into, with Davies confirming “we will offer cheap seats and nothing more than that”.
Davies also confirmed that Tiger will be targeting smaller airports and regional cities as part of its activities, while also saying that while Tiger will be employing some 1,000 staff in Australia, this compares with a few hundred in Asia, with many in Aus to be outsourced, with the airline taking advantage of the economies of scale already in place through its Asian operation, suggesting that maintenance and activities such as call centres will be based offshore.
Tiger’s launch is anticipated to begin an airfare war, with fares potentially less than $10 plus taxes of course!
Tony also stressed that Tiger has no commercial relationship whatsoever with Singapore Airlines not is there any intention of any, including codeshares being created.
He confirmed that Tiger would initially invest up to $10 million in Australia and that the model allowed them to become cash flow positive “very quickly”.
Tiger Airways is already successful in the Australian market, currently operating four times a week from Darwin to Singapore, and will commence a new service between Perth and Singapore on March 23rd.
It is certain though that Tiger will not be offering agents commission.
For more information, visit www.tigerairways.com
Report by The Mole
John Alwyn-Jones
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