Flyers travelling down the back of the plane in the past three years could be forgiven for wondering about an airfare war they’d seen little of.
All the action has been up the front as Virgin’s newly installed business class does battle for the hearts and minds of Qantas’s besuited road warriors.
But now that both airline groups are operating a two-brand strategy – a premium brand for the corporates and budget brand for holiday makers – the action is moving to the no-frills space.
Jetstar is the thousand-pound gorilla in the budget market, with 58 Airbus A320 jets and six slightly larger A321s operating domestic and international services in Australia and New Zealand, while a fleet of 11 Boeing 787 Dreamliners is currently being delivered from the Boeing factory in Seattle to replace Airbus A330-200s on long-haul international routes.
New Virgin subsidiary Tigerair desperately needs to grow to achieve critical mass and profitability in the Australian domestic market but it’s still tiny by comparison. In the next few months its Australian fleet will grow to 13 A320s.
Since Virgin Australia took over 60 per cent of the ownership of Tigerair Australia, Tigerair Singapore, which has another 25 A320s, is an entirely separate operation with little in common with its northern sister.
In fact, while Tigerair keeps itself at arm’s length from Virgin – there are no codeshares as there are between Jetstar and Qantas – it is deriving many synergies from the relationship.
When Tigerair recently discontinued its Sydney-Mackay flights in favour of Sydney-Proserpine non-stops giving backpackers from the south direct access to the Airline Beach region in the Whitsundays, people who’d booked Tigerair to Mackay were rebooked on Virgin at no extra charge.
And, even though Tigerair was the least reliable of Australia’s major airlines in 2013 – with only 72.2 per cent of flights arriving on time, compared with 75.7 per cent on Jetstar, 77.3 per cent on Virgin Australia and 84.3 per cent on Qantas (the runaway leader for punctuality) – Virgin has become a backup.
“Where cancellations do occur,” says Tigerair spokeswoman Vanessa Regan, “every effort is always made to minimise the disruption for our passengers through the provision of transfers onto other Tigerair services or through a new re-accommodation arrangement with Virgin Australia.”
Meanwhile, while Jetstar focuses on its troubled new ventures in Japan and Hong Kong, Tigerair ramps up the pressure at home, with the recent announcement of a third crew and aircraft base at Brisbane designed to connect more of the dots in its network and increase frequencies on existing routes like Brisbane-Sydney and Brisbane-Melbourne.
After recently adding Sydney-Adelaide and Brisbane-Adelaide, Tigerair will also soon be flying between Brisbane and Cairns and Brisbane and Darwin.
From the recent February low-season hiatus, when Tigerair had fewer than 60,000 weekly network-wide seats in the system, the airline will push that number to more than 95,000 in the next few months, according to statistics provided by the airline and calculations by the Centre for Asia-Pacific Aviation.
At the same time, according to CAPA, Jetstar’s increase is much more modest, creeping up from 272,000 to 290,000 between March and July.
Meanwhile, the battle for bragging rights about who has the better frequencies – the key to securing the loyalty of the suits – continues unabated, according to CAPA’s analysis, with Virgin-branded seats increasing in number by 6.8 per cent in the March-July period, while Qantas’s capacity growth is a more modest 1.9 per cent.
Tigerair’s return to the Brisbane-Darwin route in April triggers a fascinating four-way contest: an evening/overrnight daily return service on Tigerair starting at around $110 one-way (plus $8.50 per sector or $17 return if you don’t jump through Tigerair’s Mastercard hoops), Jetstar from around $129 (plus the identical $8.50/$17 credit card ripoff), Virgin – four mornings a week, the other three days overnight – from $199 one-way (plus $7.70 per booking – the Qantas rate now being matched by its competitor) and Qantas’s starting price of around $230 one-way.
Across Australia, the impact for travellers is to spread the reach of price competition onto more routes and to reduce the number of routes where you run the risk of getting gouged.
The Australian Competition and Consumer Commission made the right call last year when it approved the Virgin-Tigerair-Skywest merger in spite of its misgivings about a return to a duopoly.
Budget flying is becoming entrenched in Australia. The landscape looks radically different than it did at the end of the 1990s when you could either be gouged by the duopoly or catch a bus.
Are you planning a domestic holiday or a visit to friends and relatives in the next year? Are you put off the budget airlines by poor punctuality and cancellations? Who is your preferred airline for domestic flights? Do you go off service or price? Post your comments below.