Tigerair Australia CEO Update

Transcript

Rob Sharp:Look, we're really pleased with how Bali's going. Obviously, with a business case, you look at the ramp-up periods, and for us, we're very pleased with the low-cost segment. There's a lot of Australians love going up there, and that's proving to be the case. Pleasingly for us, there's They're spending a lot of money on board, so ancillary revenues are ahead of expectations and the loads are building. So for us, normally it's 18 months, 2 years to sort of get your brand presence and everything into the market, and we're on track with that, so very pleasing. Look, there's no plans at all for wide-body equipment. We're very much focused on the small narrow-bodied aircraft. The recent announcement we did make was around the 737s, and at the moment we're focused on getting the AOC approval, which is getting the regulatory approvals to put those aircraft onto our own AOC, and that'll then allow the fleet change to occur, and any future growth vehicles, which we have none to announce today, but they will all be 737 aircraft. The aim being in 3 years to have a single fleet. The Valiant Alliance is a really unique alliance. It's leveraging some disruptive technology, and so for the first time ever, it's allowing effectively cross-merchandising between low-cost carriers and protects your ancillary revenue, but allows you to keep your brand strength in the market. So what that's done is commercially opened up a distribution channel right across Southeast Asia, so obviously very important for a low-cost carrier, but for the customer, a really easy way of booking where you can book mixed itineraries across low-cost carriers with the ancillaries, and that hasn't been able to be done before. So it's quite unique, and we believe it'll really be a good value proposition for a lot of Australians who want to travel up to secondary cities in Asia, which have historically been a little complex to get to. The 737s will be replacing our current A320s, so we have 14 Airbus aircraft at the moment, and those will exit over 3 years, so that'll take our fleet to 17 737 aircraft. They'll actually be the older aircraft from Virgin, so they'll come across, and what we'll do is repaint the aircraft, put new product on, so from a customer perspective, they'll be a really, really good product in the marketplace, and for us, leveraging the group synergies, a very cost-effective aircraft vehicle for Tigerair to use domestically in particular. The brands within the Virgin Australia Group are targeting very specific markets. Tigerair will continue to stay true to the low-cost budget market, so it's really a leisure airline providing competition to Jetstar in the domestic market. In the longer term, that will stay. We're very true to the fact that we're not going to be, for example, allowing points to be earned on Tigerair. We believe that drives the costs up And so we're staying very true to the low-cost carrier. So the brands will stay as they are, very much targeting those sections of the market that are relevant to the brand. In terms of growth, Tiger's had a record over the last 3 years of looking at where those little value pools are and where the growth is, and we'll continue to do that. We have no announcements in terms of specific growth, but clearly there will be growth over time. At the moment, our focus is really getting the AOC approvals in place, because without those, there will be no growth. However, we're well on track with that program and then we can sit back and look at where next for Tiger. It's always driven by the market and the market is the key to it. We liaise with the Virgin Group to make sure that there's an optimal outcome and that's really having a deep understanding of the market and that drives those decisions. The transformation journey has been really challenging because the business was, when I walked in, was a turnaround and however when I opened the door it was basically a business startup. Of the business and the business fundamentals were operated and held up in Singapore. So to create an Australian business that was agile with a sustainable platform, we needed to really address a lot of things. So the memorable moments from there are things such as the IT systems and being able to leapfrog generations of technology and put the leading-edge technology in, but also creating a really amazing team. The team in Tigerair is very innovative and agile. There's a lot of great skills And it's been really great working with the team.

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