Jetstar keeps trying to entice Tiger Airways to ‘come out and play’. The current ‘playground’ is Adelaide, which Tiger has been trying to mark as its own with recent announcements of new routes from the city. Today’s Jetstar response has been to announce new flights from Adelaide to Perth and Cairns from February, with introductory fares that would send them broke if they were offered for any length of time across its entire network.
Tiger appears to have lost its nerve in Australia, with the bold rhetoric of its launch last November replaced by timid and loss making forays into the local market, and surrenders in Darwin and Newcastle.
It is almost painful to watch. Just like Tiger versus Jetstar Asia, where Tiger has been coming out on top.
Maybe that’s the game. You go home, I go home.
2 Comments
Ben, happpy to be corrected but I haven’t seen any ADL-CNS flight announcements, but they did announce PER-CNS taking over the 3pw service by QF.
I think TT have been forced into a corner where they’ve had to consolidate their route network on those shorter range, more profitable routes where they can build up frequencies rather than going all out as they indicated last year. It seems that in jus about every route where JQ has added capacity they have acted quickly to take out their own. Instead, they may find the hunting ground better on the routes where they are going against QF mainline (eg MEL-CBR) and offering lower fares on these while sitll being able to cream some yield from them, rather than going on fortress routes where JQ has a high number of frequencies.
Ellis, No my bad fingers, leaving the Perth out of Cairns! I think you’re right about the opportunities to take on QF, and I suspect we would have seen more of this had they grown their fleet faster. But JQ is making TT bleed wherever it goes. I think TT has to deal with the painful dilemma of greatly increasing its risk in Australia in the hope of getting some momentum, or being pinned down and mauled. It is interesting to see Dixon highlighting in recent weeks the weakening demand for the Jetstar product, and Godfrey pointing out that being in the middle is really pretty comfortable when the budget travellers stay at home and the higher fare users in business move (or get moved) into the less expensive product it has developed.
Gosh, we might be seeing a race for the middle, rather than the top or the bottom.
But don’t hold me to this being a firm bet. Anything could happen. And the Qantas plan to put Blackberry and iPhone data access on all its trunk route domestic flights could prove to become a very decisive advantage.