Tiger Airways Australia is set to resume flying between Victoria and Tasmania in November, for the first time since the airline was grounded in the middle of last year.
From November 1, the airline will fly two daily return flights between Melbourne and Hobart, with a third daily return service to operate at peak travel periods.
Tiger is returning to the route due to demand, said Tiger Australia's chief executive Andrew David.
"Because the Melbourne-to-Hobart route has proven so popular with inbound and Tasmanian customers in the past we are confident that demand for this sector in the future will be strong," Mr David said.
The Tasmanian Government had offered financial support to secure the services, but Mr David said he was not at liberty to say how much, but that the support was "like-for-like":
"They've committed some money, we've committed some money," he said.
The new services equated to 5000 to 7500 potential visitors a week through Hobart Airport, he said, and Tasmanian flights would be launched with sale fares available from today.
The new services mark the latest chapter in Tiger's service recovery.
The Civil Aviation Safety Authority has lifted the cap on the number of flights Tiger Australia can operate to 64 sectors a day, following its six-week grounding last July.
Tiger is progressively ramping up its services and destinations, planning to operate 44 flights a day between its Australian ports by July, 50 daily by August, 58 by September and 64 a day by October.
Mr David said a lot of effort had gone into rebuilding confidence in the airline with the Civil Aviation Safety Authority and the airline's own staff.
"A lot of my focus has been on the operational side — getting the regulator comfortable again and proving our operational performance," he said.
However, the airline's improvement in punctuality and reliability has been aided by only flying seven of its fleet of ten planes, leaving three as back-ups.
The three spare aircraft will be progressively returned to service in Sydney from July.
The challenge, Mr David admits, will be to maintain punctuality while putting 10 aircraft back to work.
"I'm acutely aware we have spare capacity. Behind the scenes we are working very hard to maintain our on-time performance. That's one of the challenges for us, as we go back to full capacity," he said.
To help matters, an 11th aircraft due to arrive in August will be used as an "operational spare", he said.
"We're working very hard to make sure we don't drop the ball."
Tiger's announcement was enthusiastically welcomed by the Tasmanian government.
"Tourism Tasmania will continue to work closely with Tiger on co-operative marketing activities and other in-kind support," said state tourism minister Scott Bacon.
"Sufficient and reliable access to our island state isn't just important for tourism, it's a fundamental requirement for our economy and our community," he said.