Sunday, July 1, 2012

Tiger Airways embarks on TV ad campaign as it moves to boost its profile

A YEAR after it was grounded for safety reasons, Tiger Airways Australia says its biggest challenge is capacity being pumped into the market by its competitors, and convincing travellers to try its improved services.

Tiger Australia chief executive Andrew David said complaints were down dramatically as the airline concentrated on boosting its on-time performance and consumers became used to its low-cost model.

The Singapore-backed airline is embarking on its first TV advertising campaign as it moves to boost its profile and "keep the duopoly honest".

Tiger spent six weeks out of action in July and August last year after the Civil Aviation Safety Authority grounded it over safety concerns.

It has increased services out of Melbourne during the past year.

The grounding and its inability to fully use its local fleet of 10 aircraft combined with high fuel prices to produce a $61 million operating loss last financial year.

Yesterday it began the trek to full utilisation when it launched its Sydney base, which will provide 150 jobs and be home to three aircraft, with the start of services to the Gold Coast, offering 1400 extra daily seats on the route.

That will be followed next month by Sydney-Brisbane services and then more flights to Melbourne to bring three aircraft into service by early September.

It launched the base with sale fares from $10 to Melbourne, $30 to the Gold Coast and $40 to Brisbane. An 11th aircraft, due next month, will initially be used as an operational spare to maintain the airline's spectacular on-time performance improvement before it looks at further growth.

"The first base for us is to get all these aircraft flying," Mr David said. "We're never going to make any money with the aircraft on the ground, so by September we've got full utilisation.

"We've then got to keep going and we've got to build some scale.

"Yes, we've got a great low-cost base but you're never going to make any money if you don't sweat the assets, so that's first priority.

"The great thing with Singaporean shareholders is, of course, we've got to start making a profit," but they take a long-term view.

Many pundits wrote off Tiger at the time of the grounding, but it has since carried more than a million passengers and CASA says it is happy with the way it operates.

Mr David said the airline was working hard to get the flying public back on side.

"We have to keep working at it and working hard and making sure we get the message out with the public, because I don't think everybody is aware we're back and I don't think we've overcome all of the sins of the past," he said.

The Tiger chief said he did not see weak consumer sentiment or the two-speed economy as a problem for Tiger because people would move from expensive business fares to cheaper options.

The biggest challenge was the capacity that had entered the market, he said.

"This coming November, on Melbourne-Hobart the capacity will be up 60 per cent," he said. "We announced we were coming back into the Hobart market, Virgin has added more seats, Jetstar has added more seats."

Source : STEVE CREEDY, AVIATION WRITER From: The Australian

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