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Tiger Airways cuts Newcastle, second base to be announced soon

11-Jun-2008
  • Tiger Airways suspending Newcastle service to reallocate capacity to better performing routes;
  • Gold Coast and Adelaide now in contention as Tiger’s next Australian base, to be announced “within the month”;
  • Virgin Blue cutbacks could open the door for Tiger at the Gold Coast;
  • Gold Coast’s central location could provide Tiger a potentially powerful hub linking the southern states to Queensland, which has seen cutbacks by Qantas/Jetstar.

Tiger Airways has announced the suspension of double daily service to Newcastle in Aug-08, as part of a reallocation of capacity across its network. A spokesman stated the airline would consider resuming services to Newcastle once the airline receives more aircraft later in the year, subject to an assessment of market conditions at that time.

The move brings the Gold Coast and Adelaide into firmer contention as the carrier’s next Australian base, which Tiger expects to announce “within the month”. The base will be a city where Tiger already has intensive operations, with “double daily or triple daily services”, according to a spokesman. The Gold Coast and Adelaide, plus Newcastle, fit this criteria.

Tiger’s move pre-empts a major operational review by Virgin Blue, which could include cuts to the Gold Coast. This would open the door for Tiger to expand its presence in the East Coast, with the Gold Coast’s central location providing a potentially powerful hub for services from the southern states into Queensland, which will see cutbacks by Qantas/Jetstar.

Standard & Poor’s recently stated that airports with strong competitive positions are partially insulated from the risks inherent in the airline industry, as the strength of routes is key for traffic stability. The ratings agency stated if there is sufficient demand for a particular destination, it is likely that an airline pulling out of a route would be replaced.

As we reported in the 06-Jun-08 edition of Asia Pacific Airline Daily, “as the cutbacks flow, the opportunities grow”.


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