Tigerair Australia goes international with 737-800s as Virgin Australia's group strategy evolves

Virgin Australia is adjusting its multi-brand strategy as it hands three of its Bali routes to Tigerair Australia. The changes should succeed at reducing the losses of Virgin's international operation but the group will ultimately need to make further strategic adjustments if it is to compete effectively in Bali and other medium haul leisure markets against Jetstar's 787s and Southeast Asia's other fast-expanding widebody LCC operators.

The new Bali routes will mark the launch of international services for the Tigerair Australia brand, which has only operated domestically since launching in 2007. The flights will however continue to be operated under the Virgin Australia air operators' certificate using Virgin Australia pilots, resulting in higher operating costs.

LCC competitors on Melbourne-Bali using widebody aircraft will also continue to enjoy much lower unit costs as Tigerair Australia is not able to configure the 737-800s to maximum density - or operate its own fleet of A320s - due to the length of the route. Tigerair Australia is taking over three Virgin Australia 737-800s, which will be retrofitted into 180-seat all economy configuration.