Tigerair Australia has vowed to offer ‘‘sharp pricing’’ of fares as it faces a tougher battle with Jetstar for budget-conscious travellers but emphasises that it will not boost flights just for the sake of growth.
Analysts have warned that an over-supply of flights over the next year will be greatest at the low-cost end of the air-travel market as Tigerair embarks on plans to double its size by 2018.
In response, Jetstar has promised to ‘‘protect its position’’ in the domestic market.
Tigerair Australia chief executive Rob Sharp said the airline was now looking to expand again after a gradual return to services following its forced grounding in 2011.
But the former Qantas executive made clear that the budget airline would not be sacrificing yield – or return on fares – just for the sake of filling seats on its aircraft.
‘‘We are absolutely saying that we are growing but we will do it in a sensible way,’’ he said at the CAPA Australia Pacific Aviation Summit in Sydney today.
‘‘The aim at the moment is to get a sustainable domestic business.’’
After buying a majority stake in Tigerair last month, Virgin has said it wants the budget airline to become profitable within two years.
It is an ambitious target for an airline that has notched up losses of more than $226 million in Australia since launching services here in 2007.
Mr Sharp will present his long-term plan next week to Tigerair’s board, which includes Virgin chief executive John Borghetti as chairman.
Since the start of the year Tigerair has begun flying to a number of new destinations including Alice Springs and Coffs Harbour. However, Mr Sharp was coy when asked about where the budget airline was set to expand to over the longer term, citing commercial reasons.
‘‘Competition is good – I think it sharpens everybody’s mind,’’ he said. ‘‘This is not just about putting in $99 fares for the sake of it. It will be market driven.’’
The budget airline will take delivery of two more Airbus A320s over the next six months, which will boost its fleet to 13 aircraft in Australia.
Tigerair intends to better coordinate the arrival and departure of flights with Virgin on domestic routes but both were mindful of not ‘‘blurring the brands’’.
In recent years Virgin has reinvented itself as an upmarket competitor to Qantas, placing a greater focus on gaining lucrative business and government travellers.
Mr Sharp said better timing of flights could make a ‘‘massive difference to yields’’ – or returns on fares.
Jetstar chief commercial officer David Koczkar said there was plenty of room for growth at the low-cost end of the market and its focus was on ‘‘offering sustainable low fares’’.