Sudden changes are happening at Tiger Airways, as more of its game plan for Australia slips into visibility.
The Singapore Airlines controlled low cost carrier even went as far as saying today it is hiring customer service officers, which for this type of airline is like the devil joining the Vienna Boys’ Choir.
But the biggest surprise was its traffic figures for March.
Passenger numbers rose 8.7%, capacity rose 7.6% and average load factor improved 0.9 percentage points.
These would be good numbers in good times rather than the bad times that have Qantas predicting it will make a loss in the six months to June 30.
Tiger is small. Only six single aisle jets, or roughly 3% of all domestic capacity, a figure rendered imprecise by the use of large Qantas international jets whenever it chooses. But Virgin Blue was as tiny as Tiger in its early stages, and Tiger’s current ambition is to lift the fleet to 30 jets when it feels like it.
The comparable figures for March for the brands it competes with are:
|Airline||Passenger numbers||Capacity (ASKs)||Load Factor|
Overall, as reported in the Crikey yesterday, Qantas market share is going down and Virgin Blue’s up by disparate amounts as the recession sets in.
Tiger is gate crashing the formerly lucrative and overpriced Melbourne-Sydney sector on 3 July. The above figures will force changes on the Qantas Cityflyer, where already domestic business class is struggling to sell, and Jetstar is seriously contemplating adding directly competing discount flights using Melbourne’s Tullamarine Airport in order to curb Tiger’s entry regardless of the collateral effect on the parent company.
Tiger has also persuaded Steve Burns, a highly credentialed Irish national who was working in its Singapore headquarters to become its first commercial director in Australia, to develop its network, revenue management, marketing and until now non-existent customer service functions.
While compatriot Alan Joyce learned the trade at Aer Lingus, Ansett and Jetstar, Burns has long experience with easyJet, Europe’s second largest low cost carrier after Ryanair, and bmibaby, which to be frank, is a small and irrelevant basket case.
The other Australian airlines had always maintained they couldn’t work out why Tiger bothered entering this market other than to make a space at the table for Singapore Airlines if or when there was some major shake out leading to cross border airline rationalisations in the Asia-Pacific.
Those commentaries are now starting to look like they contain an element of self fulfilment as the recession tightens its grip on airlines everywhere.
A service oriented Tiger running amok with low fares on the Melbourne-Sydney route, with the ability to draw down additional fleet from the main Tiger operation in Asia at short notice means that the country’s largest air route will be going cheap, and probably loosing money for the airlines on a large scale, for the foreseeable future.