Domestic air fares in Australia appear to be on the way back up, along with international air fares, as the price leader, Tiger Airways, cancels its growth plans for the next year to concentrate on increasing profitability.
There’s speculation that Tiger will axe the only low-cost service to central Australia (Melbourne-Alice Springs), as well as services to other regional destinations, such as Melbourne-Mackay and Melbourne-Rockhampton, to concentrate more on the high-volume routes like Sydney-Brisbane and Sydney-Melbourne.
For the first time, airline industry analysts have begun examining the impact on air fares if Tiger Airways was to pull out of Australia altogether.
They reckon it would lead to domestic air fares up to 15 per cent higher overall. The statistics have shown that Tiger has been the undisputed “price leader” in Australia, reducing best fares on the routes it contests by up to 30 per cent.
The Singapore-owned airline largely blamed the reversal of its fortunes in Australia – from near break-even last year to a loss of $S9 million ($A6.75 million) in the year to March – on the bad summer weather in Queensland.
“We are telling the (Australian) guys to focus on getting the business profitable, focus on the profitable flying (and) maybe suspend the planned growth so we consolidate based on last year's passenger numbers,'' Singapore-based Tiger group chief executive Tony Davis told a media briefing this month.
However, the airline has been prevented from deploying more than its existing fleet of 10 180-seat A320 planes in Australia as a result of issues about maintenance oversight with Australia’s Civil Aviation Safety Authority.
Tiger has undertaken to hire more Melbourne-based staff to satisfy the regulator’s concerns.
Ironically, the decision to abandon its Australia growth comes as the airline tries harder to please its customers by improving its complaints-handling system to speed it up.
Tiger has always struggled with its public image in Australia and has been rated poorly in consumer surveys, not helped by the fact that it is the most unreliable carrier for on-time performance and, lately, by far the worst offender for cancelling flights.
In April, Tiger cancelled more than one in every 20 flights – a phenomenally high figure of 5.5 per cent of all flights or more than three flights every day.
Have you used Tiger? Has it been (as the airline insists it has been trying to achieve) a hassle-free experience? If Tiger were to exit, and fares to rise as a result, would it affect the amount if travel you’re currently doing?