Tiger hopes for brighter days under Virgin JV

Tiger hopes for brighter days under Virgin JV
By admin


Tiger Australia has confirmed it will expand its fleet to 23 aircraft by 2018 under its joint venture with Virgin Australia as the low cost carrier branded the deal its "saviour".

The transaction received the green light from the Australian Competition and Consumer Commission yesterday although it remains subject to certain conditions and regulatory approvals, including from the Foreign Investment Review Board.

Commercial director Carly Brear said the deal will put the troubled carrier in its "strongest position ever".

"Tiger has come a long way since the dark days of the grounding, but there's only so far we can go without investment," she told Travel Today.

"Although the business has had something of a resurgence since the grounding, our financial situation has been rather precarious."

In January, the carrier posted an operating loss of S$12.9 million (A$9.98m) for the three months to December.

Under the JV, both Tiger and Virgin will inject a combined total of up to $62.5 million into the business.

Brear said the investment will enable the low cost carrier to become a "true competitor" to Jetstar, enabling it to grow as it benefits from Virgin's expertise in the local market.

However she stressed Tiger and Virgin would continue to sit as two "very separate brands" with their main synergies to lie in the areas of operations and procurement.

The expansion of the fleet, which currently comprises 11 aircraft, will mean additional routes, frequencies and more low fares, she added. However, that growth remains dependent on market conditions.

Maintaining its low fares will be a priority for the airline with affordability "the core of Tiger's model", but at the same time, the airline's team is currently working hard to shift perceptions of its brand from cheap to "great value".

The focus is on ensuring better customer service and reliability rather than frills that raise fares.

"We want people to actually enjoy Tiger and to choose to come back. We don't want them to come to us by default because we're the cheapest," Brear said.

Although the carrier is haunted by a history of unreliable service and safety issues, she said figures show the carrier is now the most "on time" low cost carrier in Australia and the "second behind Qantas as a whole" with the lowest cancellation rate as a percentage of flights.

"It's not just about offering people low fares, you need to make sure they get to where they want to go," she said.

 

 

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