A day after Tiger was caught deliberately choosing to ignore an Australian safety regulation, it is being put under siege by Qantas and Jetstar, which this morning detailed massive increases in capacity on domestic routes vital to the fortunes of the Singapore Airlines-controlled low-cost carrier.
Qantas said that from next January it would swiftly deploy an additional wide-bodied A330-300 and five more single-aisle 737-800s as part of a 9.6% increase in its seat numbers country-wide in this financial year.
Its Jetstar subsidiary would increase its seat numbers within Australia by 30%, a rate of increase last seen in the country in the early part of 2001, immediately before Impulse Airlines buckled under the onslaught, and sold itself to Qantas where it became the low-cost division that morphed into Jetstar in 2004.
The Qantas plans include new links to Broome, a booming leisure destination conspicuously absent from Tiger’s network, while the Jetstar expansion emphasises new services to Cairns, where it has marginalised Tiger services and also cycles Asian holiday travellers into its domestic network through its wide-body flights to Japan and New Zealand.
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The sub-text to the Qantas/Jetstar announcements is payback for the deeply discounted fare war sparked by Tiger between April and mid-June, which is understood to have pushed Jetstar into the red for several weeks, ruined yields on Qantas flights and caused an early May profit downgrade warning from Virgin Blue, which will report its full year to June 30 results tomorrow morning.
From all accounts, that fare war failed to prevent a sharp drop in passenger numbers, which worsened the consequences of the collapse in fares in the final quarter of FY 10.
While fares and demand have slowly risen since that particular two-and-half month bloodbath for all the domestic carriers Tiger last Saturday told staff it was cancelling the two additional A320s due to enter its local fleet in November, in favour of redeploying them to flying gamblers from nearby cities in China and South-East Asia to Singapore’s new Marina Bay Sands casino complex.
Virgin Blue has also announced its participation in the Tiger hunt in that it has cancelled its loss-making domestic NZ flights from mid-October and will redirect some of those jets to its Australian services.
Tiger is now surrounded by competitors adding large volumes of cheap seats to the domestic market while it experiences a fleet freeze, and tries to argue that it knew better than to obey an important Australian safety regulation requiring the compulsory reporting of aileron malfunctions on one of its A320s.