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Feb 1, 2016

Tigerair Australia: First we take Bali, then Berlin

There was a bit more to today's unveiling of the first Tigerair Australia 737-800, which has been reallocated to it from owner Virgin Australia's fleet than was officially re-announ


The first repainted, reallocated, re-re announced Tiger 737-800
The first repainted, reallocated, re-re announced Tiger 737-800

There was a bit more to today’s unveiling of the first Tigerair Australia 737-800, which has been reallocated to it from owner Virgin Australia’s fleet than was officially re-announced.

But the headline is sarcastic. It’s about the determination of most low cost airlines to go for the throat of full service carriers, even the one that in some cases owns them.

After all, Brisbane will fall to Tigerair Australia before it ever gets around to Berlin, if for a moment Virgin Australia let this happen, although in time it may have no say in the matter if the market goes totally over to accepting bone pain and other indignities for a cheaper fare.

One way that low cost carriers, like Tigerair, invade the full service ground in market contests, is to include rows of economy seats where the space offered is superior (excluding exit row seats) to that in full service carriers as well as most of their own inventory, for a premium that means the total fare remains cheaper,for argument’s sake, than most of the economy seats in a Virgin Australia 737-800.

This wedging of full service carriers has occurred in Spirit Airlines in the US (which goes one step further with Big Seats upfront), easyJet in Europe, and Scoot, which to a casual observer, appears to have been invented to destroy Singapore Airlines, which owns it.

They all have bigger seat/value options that aim to win premium customers over from full service operations.

In the case of the Tigerair Australia 737-800s, the three jets involved will be operated for Tigerair by Virgin Australia International, replacing the VA services that fly to Denpasar in Bali from Perth, Adelaide and Melbourne starting 23 March.

They offer five rows of very spacious economy seats (or 30 seats in total) ranging from a seat pitch of almost one metre in the two overwing exit rows, and 86.5 cms in the three rows up front where there used to be eight Virgin Australia business class seats.

The overwing seats, which are conditional on being physically able and willing to help other passengers escape from a burning jet, are within a few molecules of being the same in legroom space as those on other 737s. Because of the evacuation rules, not your amenity.

However the non exit row spaced out seats offer at least 7.5 cms more legroom than most seats in comparable jets in full service use, including with Qantas and Virgin Australia.

Those three reallocated 737s mean a large increase in the total capacity of the Tigerair fleet of 14 A320, but a much smaller decrease in the capacity flown by Virgin Australia, with a diverse fleet of 777s, A330s, 737s, E-190s and ATR propjets.

The side benefit for Virgin Australia’s owners is that the fleet transfer cranks up the seat utilisation factor for the full service operation, while giving it more clout for lower per passenger cost in the Bali tourism market that not even active volcanos and terrorism concerns seem able to deter.

Tigerair Australia won’t ever get away with high fares for these more spacious seats, because the budget brand is in a contest with Jetstar, the Qantas owned low cost brand, and additionally with AirAsia in the Perth-Denpasar market. But it should be able to use them to lure away passengers from its competitors.

Where will this go? It’s a fair bet that Australia’s full service carriers don’t have a quantitative answer. But if Virgin vacates its remaining full service schedule to Denpasar in favour of Tigerair  with a healthy serve of enhanced economy seating, it may signal that it has started something it can’t, or doesn’t want to stop.


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3 thoughts on “Tigerair Australia: First we take Bali, then Berlin

  1. johnb78

    “today’s unveiling of the first Tigerair Australia 787-800”
    – that would indeed be a new direction 🙂

  2. Ben Sandilands

    This alarming typo on my part has happened so many times it has to have some deeper psychological significance.

  3. wordfactory

    When will Tiger unveil a fleet of 738s to replace its 14 A320s, which, unlike the 738s, don’t have the payload-range to get Sydney-Denpasar non-stop? From a maintenance cost point of view, it’s expensive for Tiger to retain a small orphan Airbus fleet when Virgin has 80-odd mostly 738s.


https://www.crikey.com.au/2016/02/01/tigerair-australia-first-we-take-bali-then-berlin/ == https://www.crikey.com.au/free-trial/==https://www.crikey.com.au/subscribe/

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