Tiger Airways Australia
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Commencing services in late 2007, Tiger Airways Australia is a low cost carrier based at Melbourne Tullamarine Airport. A subsidiary of Tiger Airways Holdings with hubs at Melbourne, Adelaide and Avalon airports, Tiger Airways Australia uses a fleet of narrowbody Airbus aircraft to operate a network of services within Australia. (See also under Tiger Airways' profile.)
Location of Tiger Airways Australia main hub (Melbourne Tullamarine Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Tiger Airways Australia fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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43 total articles
Sydney Airport’s redevelopment plans remain largely unchanged in its revised draft master plan issued on 05-Aug-2012 looking out to 2033. By then total passenger numbers are forecast to have doubled to more than 74 million per year. The airport has also retained plans to establish two separate international and domestic terminal precincts located on opposite sides of the main runway by 2019.
The existing T2 and T3 domestic terminals on the eastern side of the airport will be redeveloped and expanded to also cater for international services including the addition of more A380-capable gates. The T1 international terminal on the western side of the main runway will also be extended to create about four more gates. Both precincts will be equipped with swing gates able to serve domestic and international traffic from the same gate at different times.
Tiger Airways has narrowed its losses in the year to 31-Mar-2013 and extended its operating profit to a second consecutive quarter while forecasting a positive operating result by mid-Jul-2013 after the sale of 60% of Tiger Australia to Virgin Australia is completed.
The carrier also plans to add frequencies to high demand routes between Singapore and Malaysia and expects to take delivery of 10 A320 during the financial year, half of which will be allocated to the Singapore operation and the remainder between Tiger Australia and two associated airlines, Mandala and SEAir.
Tiger Singapore will use the aircraft to increase capacity by about 25% by the end of FY2014 and taking advantage of expanded bilateral rights between Singapore and Indonesia which will also boost Mandala. However, the group still faces significant challenges as it strives to nurture three affiliated carriers in Australia, Malaysia and the Philippines to profitability.
The acquisition of West Australian regional carrier Skywest by Virgin Australia has cleared its final hurdle with High Court of the Republic of Singapore giving its blessing paving the way for Virgin Australia to increase competition to regional Australia and enter the resources charter market.
The Skywest transaction is part of three equity announcements made by Virgin Australia on 30-Oct-2012 that also included the acquisition of a 60% stake in low-cost carrier Tiger Australia and the sale of a 10% stake in Virgin Australia to codeshare partner Singapore Airlines.
Only the Tiger Australia transaction remains outstanding, with the ACCC extending its deliberations beyond the original Mar-2013 deadline and a decision now not expected until May-2013.
The deals are designed to allow Virgin Australia to compete better with Qantas on all domestic fronts by gaining access to the regional network and the fly-in-fly-out (FIFO) charter markets. In addition Tiger Australia provides a ready-made option to re-enter the LCC market that Virgin Australia evolved away from as the carrier moved up-market to compete with Qantas for the lucrative corporate and government markets.
Clouds are gathering over Virgin Australia’s planned acquisition of 60% of Tiger Australia. The Australian Competition and Consumer Commission (ACCC) has delayed its decision, originally slated to be delivered on 14-Mar-2013, and has instead asked for more information about the deal from Virgin Australia and how it will impact on competition in the domestic market. No new date for a decision has been given.
The ACCC has deep concerns about the competitive impact the deal will have, given that it will effectively result in the domestic market becoming an airline duopoly by removing Tiger Australia as the third player competing with the Virgin Australia and Qantas groups.
Virgin Australia and Tiger Australia’s parent, Singapore-based Tiger Airways, announced the deal on 30-Oct-2012 as part of a trifecta that also included buying all of Western Australian regional carrier Skywest, and Singapore Airlines taking a 10% equity stake in Virgin Australia.
Virgin Australia is reaping the benefits of its global network of alliances, with a strong increase in interline and codeshare revenue in the six months to 31-Dec-2012, but lower yields in the embattled Australian domestic market meant the carrier posted a sharply reduced tax-paid profit of AUD23 million (USD23.6 million).
The carrier blames most of the AUD28.8 million (USD29.6 million) profit reduction on the introduction of the carbon tax levied on domestic flying. Lower domestic yields in a market suffering from over-capacity meant Virgin Australia was not able to recoup the AUD24.4 million of carbon tax through fares. The first half of FY2012 was also inflated by a one-off approximately AUD6 million gain from the Qantas grounding in Oct-2011.
Revenue growth slowed to 5.4% in the first half in FY2012 to AUD2.1 billion (USD2.16 billion), from 18% growth in the first half of FY2011, despite a flood of capacity entering the market as Virgin Australia and Qantas battled for government and corporate market share.
Tiger Airways enters 2013 more upbeat after ending a string of seven consecutive quarters of losses and returning to profitability in the last three months of 2012. But the Singapore-based low-cost carrier group still faces a challenging 2013 as it tries to reverse the losses at its subsidiaries or affiliates in Australia, Indonesia and the Philippines.
Tiger’s original Singapore operation has recorded an encouraging improvement to its bottom line after going through a rough patch in late 2011 and early 2012, when over-capacity led to a decline in yields and load factors. The outlook for Tiger Singapore remains relatively bright, particularly as the carrier starts to see benefits from its new connection product.
But LCC competition in Singapore is intense, making it challenging for Tiger and rival Jetstar Asia to post high profit margins. Market conditions in Tiger’s other three home markets are even more challenging, with profits in the short-term unlikely although the group remains optimistic about its long-term prospects in Australia, Indonesia and the Philippines.
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