Virgin Australia COO Sean Donohue, speaking at the CAPA Australia Pacific Aviation Summit, stated (07-Aug-2013) the rationale behind the acquisition of Skywest Airlines in Apr-2013 is to better compete in the Australian regional and charter market, while the 60% acquisition in Tigerair Australia is to compete in the low-cost market. Mr Donohue noted the carrier's
Virgin Australia rationale for the acquisition of Tigerair Australia is to compete in the LCC market
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Tigerair Australia Part 2: LCC looks to Value Alliance to drive near-term growth opportunities
Tigerair Australia has no immediate plans for expanding its international operation, which launched with three routes to Bali in Mar-2016. However, the Virgin Australia LCC subsidiary plans to expand its international network virtually by linking up with partners from the newly formed Value Alliance.
The Bali operation has been relatively successful, despite the use of aircraft wet-leased from its full service, higher-cost parent. However, for now Tigerair Australia is focused on transferring the three Bali routes to its own fleet as part of a transition from A320s to 737s, rather than pursuing growth.
The Virgin Australia LCC subsidiary could potentially pursue international growth once it secures regulatory approvals to operate international services with its own operator’s certificate. Some domestic growth is also possible once it completes the transition from A320s to 737s in 2019.
Tigerair Australia Pt 1: Virgin Australia LCC subsidiary completes transformation with first profit
Tigerair Australia has completed a challenging turnaround, with its first annual profit. The LCC, now a fully owned subsidiary of Virgin Australia, was profitable for the first time in its nine-year history in the year ending 30-Jun-2016.
Synergies with Virgin Australia, operational improvements and network adjustments have contributed to the transformation. Virgin Australia has joined its rival Qantas in employing an effective two brand strategy, with Tigerair Australia focused entirely on the leisure sector.
This is the first in a two-part series of reports on the recent performance and outlook for Tigerair Australia. This article will focus on its transformation and newfound profitability. The second will look at potential areas for future long-term growth, including in the international market and with partnerships.