Welcome To The Jungle

Tiger Airways chief Tony Davis has only just got started with his plans to revolutionise the Australian no-frills airline industry. And as Joanne McCulloch discovers, he doesn’t care who he upsets along the way. WHEN I ask Tony Davis what he thinks about Virgin Blue’s plans to consider launching a new low-cost domestic airline, he begins to laugh.

“A low-cost airline - what are they today then?” the Tiger Airways chief executive says. “The fact that Virgin had to come out and say they might have to come clean and confirm they are not a low-cost airline by launching a low-cost airline as a subsidiary of Virgin is a huge acknowledgement that Tiger Airways is right - there is a gap in the market.”

And this gap is exactly what Davis is stalking. The Singapore Airlines-owned carrier has set about redefining the nature of “budget airline” in Australia. Based on the highly successful European airline, Ryanair, it has attacked the inflated fares Australian travellers have become used to. Where in Europe, you could on any given day get a flight from say London to Portugal for £10 including taxes, in Australia even the cheapest fare for the same distance flight would cost around 30 times that.

Davis argues that the fact that so-called low-cost airlines like Virgin Blue and Qantas subsidiary Jetstar are now having to slash their fares to compete with Tiger is a sign that there certainly is a gaping hole in the airline market for a truly no-frills domestic carrier.

“The incumbent carriers were talking low-cost but not delivering low fares and we have now established a firm foothold in that marketplace,” Davis says. “By linking our Australian domestic services with international services to Asia, around China and India, we are really offering consumers fantastic opportunities across the whole region.

Read the full article in the current issue of Wealth Creator with Richard Branson on the front cover. Out Now!

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