New budget airline hints at $10 fares

The Australian AVIATION, February 10, 2007

Steve Creedy


TIGER Airways Australia has hinted it will offer fares of less than $10 when it launches its low-cost operation later this year.

Singapore-backed Tiger yesterday announced plans to break the Virgin Blue-Qantas duopoly and provide more than 1000 jobs.

While chief executive Tony Davis would not reveal ticket prices on the new carrier, he said some fares could be "single-digit" before taxes and charges.

"There will be significantly lower fares," he said. "I think people in Australia are fed up with having to pay such high fares, fed up that they can't get the same kind of deals domestically that they get when they fly with people like Tiger Airways internationally, and our new domestic airline will ensure low fares come into Australia."

Singapore-based Tiger already operates from Singapore to Darwin, and is currently offering $40 one-way fares. It intends to start serving Perth next month.

It is applying for regulatory permission to set up a domestic operation that will operate as a separate carrier. It is likely to begin with five Airbus A320 aircraft.

Mr Davis was coy about what routes the planes would fly, but said Tiger would be a national carrier that would look at regional and secondary airports as well as core markets.

The announcement was welcomed by Tourism Minister Fran Bailey, who said the new airline would provide a welcome boost to the domestic tourism market.

Ms Bailey said low-cost carriers had changed the face of tourism by making available interstate holidays that were once out of the reach of many families.

"The potential entry of another low-cost carrier could deliver a welcome boost to the domestic tourism industry, which has struggled in recent years from tough competition from plasma TVs and other consumables," she said.

Virgin Blue did not comment but Qantas chief executive Geoff Dixon expressed confidence his airline would take the additional competition in its stride.

Tiger has been flying since September 2004 to destinations in Asia. It is 49 per cent owned by Singapore Airlines. Other investors include the Singapore Government's investment arm Temasek Holdings, US private investment firm Indigo partners and a family company of Ryanair founder Tony Ryan.