Qantas and Virgin Blue are being forced into a full scale fare war with Tiger Airways at a very painful moment in domestic aviation in Australia.
The Singapore Airlines controlled low cost response to Jetstar opening a subsidiary in Singapore has announced more than doubling its Sydney-Melbourne flights to up to nine daily returns from 4 October.
It will also double the Adelaide-Sydney frequency to two flights daily from the same day.
This is especially bad news for Qantas and its Jetstar subsidiary, and probably Lindsay Fox’s Avalon Airport.
Jetstar CEO Bruce Buchanan, recently discounted the option of switching flights from Avalon to Sydney to Melbourne’s main airport at Tullamarine because “it might cause problems for Qantas.”
Memo Bruce. Remove head from wherever it is. Avalon departures to Sydney in response to Tiger stealing your lunch are plain stupid.
Why on earth would anyone schlep all the way to Avalon if the competition is ripping you up from Tullamarine?
The strategic brilliance of Qantas under Geoff Dixon launching a Jetstar Asia subsidiary in Singapore is now becoming apparent. Tiger has gone for the major domestic prize, with more to come, and the truly silly notion that Jetstar has to avoid competing directly with the increasingly irrelevant current format of the Qantas Cityflyer high fare services on the route is obvious.
Dixon’s successor, Alan Joyce, who also launched Jetstar, knows the harsh reality and has seen the numbers, and has a plan.
It will be a plan that needs to be announced, and made to work, fairly soon, as the days of charging anything over $400 one way between Australia’s two largest cities are numbered.
2 Comments
Been a lot of frankly ridiculous comment coming out of Australia about an Air NZ / Virgin Blue tie up. Why would Air NZ want to buy into a marginal second tier Australian airline? Again??!!?!
Seems to be mostly coming from desperate Sydney based investment bankers trying to arrange an exit/capital raising from Virgin Blue. Safe to say Air NZ have learnt their lesson from the Ansett debacle and won’t be giving away all the hard work since (newish fleet, $1b in cash, hardly any debt, dominance of almost every route flown).
A far more obvious tie up, via simple code sharing would be between Air NZ and Tiger. Feeding traffic from Air NZ’s Melbourne-NZ flights into Tiger’s Tasmanian, Canberra and Alice Springs flights and vice versa would benefit both airlines.
Singapore airlines and Air NZ have a pretty good relationship, are both in the Star Alliance and have zero route duplication. Only negative I could see is whether Air NZ would be prepared to risk their brand and customer satisfaction by associating with Tiger. May be worth it as a quid pro quo to keep Tiger off the Tasman & NZ routes though.
As Tiger continues to grow its network in Australia this should look increasingly compelling to both sides.
Hey if they’re going to up their flights, great, just song long as they’re not going to cancel at the last minute because there’s not enough booked,,,