Budget airline Tigerair has soared under Virgin Australia’s wings as it reaps the rewards of a customer service makeover and a shiny new terminal.
Virgin’s low-cost carrier broke into the black with its highest ever underlying earnings result of $13.9 million for the first half of the financial year.
The result was a major turnaround on the $24.8 million loss suffered a year earlier and confirmed Virgin’s predictions that the once-troubled carrier would break even this year.
Tiger raked in $243.8 million in revenue during the six months to December 31, and led rival Jetstar, which is owned by Qantas, in on-time performance.
“The successful turnaround of Tigerair Australia just continues,” Virgin chief executive John Borghetti told reporters on Thursday.
Virgin Australia took full control of Tigerair for just $1 in 2014 and launched a major revamp of the loss-making carrier.
Mr Borghetti attributed Tiger’s success to a revamp of its passenger experience.
“A low cost carrier does not mean it has to be low service, you can smile and charge the same amount,” he said.
The upgrade of the airline’s Melbourne Airport home to the new Terminal 4 has helped freshened up Tiger’s appeal.
“Melbourne Airport was one of its biggest problems. It was like going on safari by the time you got to the aeroplane,” Mr Borghetti said.
“Now it’s got one of the best Tiger experiences in Australia. The product enhancement that’s been done just through improvement of infrastructure but also improvement of the booking process has been phenomenal,” he said.
Tiger will also begin to fly its first international routes next month after Virgin offhanded some of its underperforming Bali routes to its no-frills carrier.