Singapore’s Tiger Airways applies to launch new Australia domestic airline

In an announcement sure to upset Qantas, its subsidiary Jetstar, the upcoming Qantas sale and until now the incumbent’s sole competitor, Virgin Blue, who compete head to head on domestic routes in Australia, international Singapore based low fare airline Tiger Airways has announced that it is seeking regulatory approval to establish a new domestic Australian airline in competition with Virgin Blue and the Qantas Group.

The founding shareholders in Tiger Airways are Singapore Airlines Limited (49%); Indigo Partners LLC, the investment firm founded by Bill Franke, (24%), Irelandia Investments Limited, the private investment arm of Tony Ryan, founder of Ryanair and his family (16%) and Temasek Holdings Pte Ltd (11%).

So, with Tiger Airways 60% owned by Temasek Holdings, the Singapore Government’s investment holding company and Singapore Airlines, industry analysts are suggesting that Tiger’s entry into Australia could be a back door entry into Australia for Singapore Airlines. 

Tony Ryan and Bill Frankes’, involvements also indicate a very well thought out and considered strategy.

With plenty of blood on the table between the Australian Government and Singapore Airlines, as result of the carrier being refused permission to buy Ansett and latterly operate on the Pacific and more recent comments by SQ’s CEO, the industry is well aware of SQ’s desire to have an Aussie based operation.

Analysts also say that the Tiger operation may well be undertaken in some form of partnership or alliance with WA based Skywest, also majority owned by Singapore interests, as is east cost regional carrier rex. 

Tiger Airways President and CEO, Tony Davis, [look out for TravelMole on Monday as The Mole is meeting with Tony for a face to face chat this afternoon], said the award winning airline, which carried a million passengers last year was ready to enter the market and deliver Australians genuine low fares, competing in a market which has returned to a cosy duopoly and seen fares increase, adding, “Fares are too high in Australia and we see the opportunity to deliver consistently low fares on all our routes”. 

He also said, Unlike others in this market, we won’t be a low cost airline selling high fares, we’ll be low cost and very low fare.”

“Asia has embraced the concept of genuine low fare travel and we’ve seen large numbers of people travel because of our low-fare formula.”  “It is no surprise that our entry into the Australian market in 2005 proved so popular.”

“The introduction of Tiger Airways services between Darwin and Singapore has been a major boost to regional tourism in the NT and we’re consistently selling fares on our international flights cheaper than domestic specials offered by the duopoly,” Mr Davis said.

He said the start of Tiger’s new service between Singapore and Perth next month is already proving popular with travellers snapping up the lowest fares in the market.

“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.

He said Tiger Airways would change the face of airline travel in Australia by providing budget conscious travellers with affordable, efficient and reliable services.

The Tiger Airways business model is based on Europe’s successful Ryanair, which uses its very low cost base to deliver very low fares. “We certainly benefit from the experience and knowledge available to us through having the Ryan family as investors in Tiger Airways,” Mr Davis said.

Mr Davis outlined the company’s plans to Federal Ministers yesterday and the airline has now commenced the process to obtain an Australian Air Operator’s Certificate (AOC).

Mr Davis said Tiger would work closely with the Australian Government agencies to deliver the information it requires to complete the approval processes. 

In addition to the application to the Civil Aviation Safety Authority (CASA) for the AOC, Tiger Airways has advised the Foreign Investment Review Board (FIRB) of its intent to establish a new Australian domestic airline as part of the Tiger Airways Group.

Mr Davis said that Tiger Australia’s inception would create up to a 1,000 new jobs, both direct and indirect, across Australia.

Tiger Airways has already established a successful international presence 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.

Mr Davis said the Tiger Airways group had five new Airbus A320 aircraft available in 2007 and the resources ready to allocate to the Australian operation as soon as the necessary approvals have been granted.

Further announcements will be made in due course about operating schedules, fares and employment opportunities.  In the meantime, people interested in being kept informed about Tiger’s plans can visit www.tigerairways.com

Neither Qantas or Virgin Blue spokespersons returned calls or responded to requests for a response made by The Mole this morning – perhaps both are circling the wagons!

Report by The Mole