Tiger Airways bookings up despite economic crisis

According to AFP, budget carrier Tiger Airways says bookings are up despite an escalating global economic crisis.

Matthew Hobbs, a spokesman for Tiger Airways, said travellers are seeking cheaper alternatives to allow them to fly by air, adding “We are not seeing a decline… We are seeing that people are substituting from premium carriers to budget carriers like Tiger because they still need to travel.”

“Forward bookings show that people are still booking and they are still travelling but they are looking for the best price.”

Hobbs said budget airlines had historically experienced growth during crisis periods such as in the aftermath of the September 11, 2001 attacks in the United States.

While Tiger Airways will monitor the travel market closely, Hobbs said the airline would proceed with plans to expand flights and its fleet.

From December 1, the airline will increase service from Singapore to Kuala Lumpur to five times a day from once a day, he said.

Tiger Airways, which is 49 percent owned by Singapore Airlines (SIA), says it would increase flights to Bangkok, Phuket and Macau later this month.

Four more Airbus planes are scheduled for delivery between December and March, raising the carrier’s fleet from 12 to 16, Hobbs said.

“We will continue to monitor the market conditions for opportunities,” he said.

Andrew Herdman, director-general of the Association of Asia Pacific Airlines, warned Wednesday that some airlines would not survive the worsening global economic situation.

He said the biggest challenges were weakening passenger demand, in particular first and business class travel, and uncertainty over the economic outlook.

SIA, one of Asia’s most profitable carriers, said it was watching changes in travel demand.

“We are monitoring any changes in demand that may occur as a result of the deteriorating global economic position,” SIA spokesman Stephen Forshaw said. “We will remain nimble in the deployment of capacity going forward.”

Meanwhile, Hong Kong airline Cathay Pacific has been “hit hard” by the global financial crisis with a significant drop in the number of first and business class travellers, senior managers said.

Cathay’s chief executive Tony Tyler said that concern had shifted from the sky-high price of oil earlier in the year to weak passenger numbers.

“In the first half of the year the problem was very much a cost crisis caused by runaway fuel prices, but now, in the midst of a global financial meltdown, we are also being hit hard on the demand side,” he wrote in the company’s internal newsletter, released Wednesday.

“The fact that revenue growth is stalling in our biggest market, Hong Kong, is a serious worry.”

“We are very exposed to the financial industry here and when banks, our biggest corporate customers, cut or even just curtail their travel plans we know we can expect to be in for a rough ride.

“I wish I had something more optimistic to say but the truth is that Cathay Pacific and the airline industry as a whole has entered another very troublesome period,” he added.

The company has experienced a fall-off in passengers travelling in the most lucrative seats in both August and September, said James Tong, Cathay’s general manager of sales for Hong Kong and China.

“A lot of companies are now trading down from first to business class, or from business to economy and a number are cutting travel altogether,” Tong said in the same company newsletter.

“The worst hit is front-end travel for long-haul flights, with a significant drop compared to last year when there was a lot of IPO activity from mainland China companies.”

Tong said he expected business could even drop off further: “This is just the beginning.”

“We usually see a surge in business travel in September after the summer peak, but this year we experienced a weak August followed by a static September,” he said.

In August, Cathay announced losses of HK$663 million (A$124 million) in the first half of 2008 due to soaring fuel prices. It has since cut the number of flights to North America.

A Report by The Mole