The story
Australian government policy and legislation currently permits airlines that are 100% foreign-owned to operate domestic airline services within the country.
The change in regulations originally applied only to New Zealand-owned airlines in 1996, but were later relaxed, resulting in the establishment of Virgin Australia. Australian international airlines are still subject to ownership rules that limit foreign ownership to 49%.
The Foreign Investment Review Board gave approval for Tiger Airways Holdings to establish a wholly owned Australian subsidiary in March 2007 without any special conditions. On 16 March 2007, Tiger Airways Australia Pty Ltd was incorporated in the Northern Territory, although the company was based in Melbourne, with Melbourne Airport being the airline's major hub.
Five aircraft and $10 million were committed to start the subsidiary. The airline's business model was based on that of sister airline Tiger Airways in Singapore, which included attempting to increase the total market size (number of passengers), control operating costs, and maximise the number of sectors served. One way it planned to keep costs low was by avoiding expensive airports.
Tiger undertook the final stage of Australian regulatory procedures on 20 November 2007, successfully performing two proving flights from Melbourne to the Sunshine Coast and Launceston. Each carried officials from the Civil Aviation Safety Authority (CASA) as well as Tiger crew. Tiger received its Air Operator's Certificate on 22 November. The airline projected initial traffic of two million passengers annually.
Tiger Airways Australia's first scheduled flight was TT 7402, which departed from Melbourne for the Gold Coast on 23 November 2007. The airline managed services out of a single base – Melbourne Airport.
On 31 May 2008, the airline announced that passengers would be charged a fee for checked-in luggage. The fee was $10 (for 15 kg of luggage) at booking or $20 at check-in.
Tiger announced on 3 April 2009 its intention to launch in the Melbourne–Sydney market, the fifth busiest passenger route in the world at the time, signalling an end to its operational policy of avoiding expensive airports. On 18 July, Tiger announced an increase in its Melbourne–Sydney flights by up to nine flights a day in each direction, and doubling the capacity on the Adelaide–Sydney route. New aircraft were expected to arrive starting on 4 October 2009. On 5 November 2009, Tiger Airways announced its intention to launch into the Brisbane market with services to Melbourne, Adelaide and Rockhampton. Tiger celebrated these routes for $2 during its Second Birthday sale, along with all Tasmanian routes and the popular Melbourne- Sydney route.
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Tiger Australia announced in February 2010 that the airline was now profitable.
Former MD Shelley Roberts departed on 1 June 2010. Her successor was Crawford Rix. "As far as I am concerned, on-time performance is going to be a big area that we will be focusing on," said Rix in a media interview.
On 16 July 2010, Tiger Airways announced its intention to cease flying from Launceston Airport as of 2 August 2010. The Adelaide–Hobart route was also to be suspended. On 16 September 2010, Tiger commenced services to Cairns, operating a late night daily service from Melbourne. On 21 October 2010, Tiger announced that it was adding two Airbus A320 aircraft to the Melbourne base in the new year, bringing its Victorian fleet to a total of ten aircraft, in line with a deal struck with the State government. Tiger announced on 25 October 2010 its intention of completing the 'golden triangle' by expanding onto the busy Sydney–Brisbane route, offering double daily frequencies.
On 7 March 2012, Tiger Airways announced that it would reopen a second base at Sydney Airport On 4 September 2012, Tiger announced it was resuming flights from Melbourne to Adelaide, beginning from 1 November 2012.
In October 2012, Virgin Australia Holdings announced its intention to purchase 60% of Tiger Airways Australia. The deal was completed in July 2013, after the airline had changed its name to Tigerair Australia.
On 18 December 2012, Tiger began direct return flights from Mackay to Melbourne and Sydney. On 6 February 2013, Tiger Airways Australia announced it would resume services between Melbourne and Sunshine Coast/Alice Springs, and begin services between Sydney and Cairns/Alice Springs. Just over a week later, Tiger Airways Australia began its first intrastate route, from Sydney to Coffs Harbour.
On 17 October 2014, Virgin Australia Holdings announced plans to acquire the remaining 40% of Tigerair for $1. Virgin retained the Tigerair name and acquired the brand rights for Tigerair to operate to some international destinations from Australia.
On 7 August 2015, it was announced that Tigerair Australia would begin operating its first ever international services to Denpasar from Melbourne, Adelaide and Perth, beginning from 23 March 2016. On 18 August 2015, Tigerair moved into the newly opened Terminal 4 at Melbourne Airport, which features new technology automated check-in kiosks and bag drop facilities, as well as an expanded departure lounge and more shopping and food choices. On 27 August 2015, Tigerair Australia announced three weekly return services between Melbourne and Coffs Harbour. On 2 March 2016, the airline announced an additional weekly return service between the two locations. On 22 October 2015, Tigerair revealed a new look for the airline, featuring new uniforms, website, booking system and an improved check-in experience.
On 9 December 2016, Tigerair resumed flights between Canberra and Melbourne after a gap of five years.
On 3 February 2017, Tigerair ended flights to Bali, started 11 months before on 23 March 2016, citing approval issues with Indonesian authorities. On 14 September 2017, Tigerair added a new Canberra–Brisbane domestic route with three weekly return services.
On 2 September 2019, Virgin Australia Holdings Managing Director and CEO Paul Scurrah unveiled a new organisational structure for his executive leadership team designed to bring the three flying businesses – Virgin Australia, Virgin Australia Regional Airlines (VARA) and Tigerair Australia – closer together. Under this structure, the position of CEO Tigerair ceased to exist, with the operations of Tigerair being led by an Executive General Manager accountable for the relevant Air Operator's Certificate and reporting to the VAH Chief Operations Officer, and commercial and corporate functions reporting centrally within the Group.
In February 2020, Virgin Australia Holdings announced it would reduce Tigerair's fleet from 13 to eight, exit five loss-making routes, and close its Brisbane base. Operations were suspended on 25 March 2020 as a result of the COVID-19 epidemic. On 3 April, all pilots were made redundant. Following Virgin Australian Holdings being placed in administration and later sold, new owner Bain Capital confirmed the brand would be retired. Tigerair was officially discontinued by Bain on 10 September 2020. Its Air Operator's Certificate was retained for potential revival.
Operators such as Rex Airlines and Bonza came into its market but later failed, sparking the market being labeled 'in crisis' by the Transport Workers Union of Australia. Bonza went into liquidation, while Rex Airlines' attempt to compete in the key city-city market caused the airline to go into administration in mid-2024.
Competitors' reactions
The arrival of Tiger Airways Australia in the market resulted in varied responses from its primary competitors, mainly Qantas (and its subsidiary Jetstar) and Virgin Australia. Jetstar was particularly vocal, with its then chief executive Alan Joyce quoted as saying "Tiger and what they have done have come across as a joke, and will probably continue that way". He claimed that Tiger was losing over SGD$60 million over the previous two years of operations out of Singapore.
Air fares began to drop as special offers and other promotions were launched, such as Jetstar's announcement that it would "double the difference of any competitor's fare that is cheaper than its own fares". This was soon followed by a bonus system to entice its customers to stay with the airline.
Tiger Airways Australia had previously been quoted as planning to offer "single-digit" one-way fares when it began service. The announcement of $80 flights from Melbourne to Darwin was met with criticism from Jetstar.
Virgin Australia considered the possibility of establishing a low-cost offshoot to fend off Tiger Airways.
In a bid to increase its share of low-cost traffic, Melbourne Airport announced plans to cut usage fees soon after Tiger's announcement of establishing a hub there. Tiger's mention of New Zealand as a potential market raised concerns in that country.
Just days before the launch of Tiger Airways Australia, Jetstar offered 5,000 seats on 21 November 2007 for the price of five cents, inclusive of taxes, on seven domestic routes, costing the airline $25 per seat. Jetstar claimed that the sale has nothing to do with the Tiger launch, while at the same time referring to them as "competitive". Jetstar's spokesman, Simon Westaway, was quoted as saying that Tiger Airways "are a good airline in their own right. We are not going head to head. We respect them for the competitor that they are going to be".
On 23 November 2007, Tiger Airways criticised Qantas for being unable to provide ground handling services to the airline at Alice Springs Airport, forcing it to delay its launch to the city by three months to 1 March 2008. The airline had promised to pay any cost to Qantas, but services were still denied. Qantas executive general manager John Borghetti responded by saying "assisting competitors is not part of my job description".
Tiger Airways Australia celebrated its first anniversary on 19 November 2008 with a "Free Seats" campaign, which resulted in 100,000 seats on sale, of which half sold out within the first few hours. The airline celebrated its second birthday on 23 November 2009 with thousands of seats on sale for $2.
From Wikipedia’s article on Tigerair Australia, shared under CC BY-SA 4.0.4