'Everything we do is about offering the seat for the absolute lowest fare' ... Crawford Rix.
Tiger's Australian chief defends the airline's policy of adding ancillary charges to cheap tickets, writes Clive Dorman.
Get used to it: that's the message Australia's cheapest airline is sending Australians who, according to mounting complaints with state consumer tribunals, haven't accepted the airline industry's latest pricing model.
Even though Australia has had low-cost airlines for 20 years, Tiger Airways is pioneering the "unbundling" of airfare components that produces low "headline" fares but a raft of optional extras, called ancillary charges.
For example, you need to book about a month in advance to get the current $24 one-way fare between Sydney and Melbourne. That doesn't include a $6 credit-card fee (compulsory unless you have an Australian-issued Mastercard debit card) or checked luggage charge ($15 for 15 kilograms - but $50 if you arrive at the airport without having paid for a luggage allowance - plus $15 a kilogram for excess baggage). In comparison, Jetstar charges $10 for 20 kilograms of luggage on top of its cheapest discounts.
In the recent annual Australian domestic airline customer satisfaction survey by Roy Morgan Research, Tiger Airways ran a distant last behind Qantas, Virgin Blue and Jetstar, with only 51.1 per cent of its customers saying they were very or fairly satisfied with the experience. (Among the big carriers, Qantas won narrowly ahead of Virgin Blue with 81.6 per cent).
After boasting it was Australia's most punctual airline in 2008, Tiger is running last in that category, with just 78 per cent of its flights on time this year (although Australia does lead the world for punctuality; 78 per cent in Europe or the US would be considered acceptable).
The new managing director of Tiger Airways Australia, Crawford Rix, admits the airline has much work to do to convince its customers to accept the ancillary pricing model, with cheap headline fares (typically about $28) but strict rules about ancillaries that can result in hundreds of dollars of extra charges.
In large forums such as airlinequality.com, Tiger gets mixed reviews, with many saying it's essential to understand the rules before you use the airline.
"As an industry, particularly in Australia, we haven't been very good at getting the message across about ancillary revenues," says Rix, who was brought in to fix the airline's Australian problems and keep driving its fast growth.
Rix has spent the past four years as chief executive of a British low-cost carrier, BMIbaby, whose parent British Midland Airlines is now part of the growing Lufthansa empire.
On fares, Rix says: "We're taking all the elements out so that customers can choose what they want to buy or not so that we can get the fares as low as possible …
"We do, as an industry, get a lot of bad feedback for that. But a mobile phone company, where you buy a package and you go over your contract amount, you're charged and we don't see complaints. I think we've actually got to get that message across."
Rix says it's not about gouging customers but about making pricing as transparent as possible.
"The way we're doing it at the moment I believe is right but that doesn't mean we won't review it," he says. "We want to keep it simple, we want to keep it straightforward and we want it to be honest.
"I do think we need to do an education job, not just Tiger Airways, but as an industry generally."
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