Tiger Airways trip report #2

[Yada Yada]

I really enjoyed milocole's trip report on Tiger. Apparently that thread hit some turbulence and everyone had to return to their seats and fasten their seatbelts. Lucky I missed the storm. Thanks to the mods for their quick action and for leaving the good bits of the thread behind!

Anyway, as Petch said, the report was hilarious and as drron said, a timely reminder for frequent flyers to avoid the combination of LCC flights and schoolies week.

Another interesting thing that the trip report makes evident: there really is a distinct difference between Tiger and Virgin Blue. Some commentators felt that Tiger's entrance would challenge VB. I can't see that happening. JQ is the one who has the most to lose so it will be interesting to see how they deal with the challenge. If TT ramp their fleet up as planned, there will be quite a bit of LCC capacity on the market and, I suspect, a tight race to the bottom.

[city8flyer]

I don't know about that. I feel a significant percentage of DJ's business go to passengers who seek 'good value'. Because of the current small price difference between DJ and JQ fares, most travellers opt for DJ, both for convenience sake (because of bad stories on JQ) and good value. However with the arrival of Tiger, JQ's prices will be forced down. At the moment, from what I have seen....... DJ are unwilling to lower their prices. If DJ continue with this behaviour, the price differential in my opinion will be too significant....... and alot of their customers seeking 'good value' will be driven off to the low cost carriers.

Example: Would the traveller seeking good value for MEL-ADL choose TT at $39.95 (Regular fare if you book 'online':TT give a $10 discount on the 'Regular Fare' if you book your fare online) or DJ at $95 (Promotional fare)?

After all ........ there really isn't too much difference between the hard products (for what you don't have to pay for) of DJ & JQ/TT. With JQ unveiling a frequent flyer program in the near future, the gap between the hard products of JQ and DJ becomes even smaller. I refuse to count Live2Air & Lounge as justification for DJ's higher prices, because you have to pay for them.

[Yada Yada]

After all ........ there really isn't too much difference between the hard products (for what you don't have to pay for) of DJ & JQ/TT. With JQ unveiling a frequent flyer program in the near future, the gap between the hard products of JQ and DJ becomes even smaller. I refuse to count Live2Air & Lounge as justification for DJ's higher prices, because you have to pay for them.

I view it differently. Virgin Blue has been targeting business travellers for some time now, and successfully. This type of customer wants good frequency, friendly/professional service, a tiered FF program with relevant partners, lounges in the major ports, etc. They operate out of the main terminals, they are about to introduce a premium economy option, and will have more regional routes with the E-Jets, etc.

Contrast that with Tiger - there are no services into/out of SYD, in MEL they operate out of separate terminal (a barn like AVV), no lounges, pay extra for luggage, etc. They just aren't pitching for the same customers.

It may well be the case that some of DJ's lower-end customers - i.e. those who fly infrequently and are quite price sensitive - fly Tiger because of the lower advertised fares. However I wonder if they will remain repeat customers after having the real low cost carrier experience? I doubt regular pax will fly TT.

[crazydave98]

I don't know about that. I feel a significant percentage of DJ's business go to passengers who seek 'good value'. Because of the current small price difference between DJ and JQ fares, most travellers opt for DJ, both for convenience sake (because of bad stories on JQ) and good value. However with the arrival of Tiger, JQ's prices will be forced down. At the moment, from what I have seen....... DJ are unwilling to lower their prices. If DJ continue with this behaviour, the price differential in my opinion will be too significant....... and alot of their customers seeking 'good value' will be driven off to the low cost carriers.

After all ........ there really isn't too much difference between the hard products (for what you don't have to pay for) of DJ & JQ/TT. With JQ unveiling a frequent flyer program in the near future, the gap between the hard products of JQ and DJ becomes even smaller. I refuse to count Live2Air & Lounge as justification for DJ's higher prices, because you have to pay for them.

The Lounge entry is already included in the price of our Corporate Plus (fully flex Y) fare or you can buy an annual membership same as Qantas Club, or if you are a Gold Velocity member membership is free. Entry to The Lounge will also be included with the new Premium Economy, as will Live2Air, at a price point below Qantas full economy. I think that will provide quite some product differentiation from QF, JQ & TT/TR.

Virgin Blue operates 28 services a day SYD-MEL, 20 on SYD-BNE, 11 on BNE-MEL and 10 on SYD-ADL (with QF operating a few more on each route - 35 & 23 for the first two routes respectively). Tiger operates 0 and has said it won't go into SYD until it gets the right prices. There is also not a whole lot of thinking going on at the top of Tiger. Tony Davis said "we're not going into Sydney and we don't need to - look at Ryanair which doesn't fly out of Heathrow". Yeah good one - Ryanair services 3 other London airports (Stanstead, Gatwick and Luton) so it has London pretty well covered. There is only one airport in Sydney that can take A320/B737. So until Tiger operates with good frequencies on these routes, it's between us and Qantas.

We have always said that Qantas is our main competitor which is why we introduced Velocity, The Lounge, live2air, tiering for Velocity, and soon Premium Economy. We compete on value against Qantas, not on price against Jetstar & Tigger.

Jetstar on the other hand is going after Tiger very hard - look where it is putting its A321s and additional capacity and new bases (Perth & Darwin). In its most recent financial statements (2006) Tiger had accumulatd losses of SGD63m and a profit margin of -50% (that is they lost 50 cents for every dollar of revenue) which is a world first amongst low cost airlines, so their pricing is very obviously unsustainable if they want to eventually make a profit. They are just trying to buy market share without actually doing anything smart or different.

cheers

CrazyDave98

[clifford]

We compete on value against Qantas, not on price against Jetstar & Tigger.

Jetstar on the other hand is going after Tiger very hard - look where it is putting its A321s and additional capacity and new bases (Perth & Darwin). In its most recent financial statements (2006) Tiger had accumulatd losses of SGD63m and a profit margin of -50% (that is they lost 50 cents for every dollar of revenue) which is a world first amongst low cost airlines, so their pricing is very obviously unsustainable if they want to eventually make a profit. They are just trying to buy market share without actually doing anything smart or different.
cheers
CrazyDave98

Hi, Dave,
As someone who has flown QF, JQ, DJ and TR recently. I think I can comment objectively.

I think DJ's biggest worry would have to be TR. They are a quality low-cost airline (backed by SQ), with well trained and courteous staff. How does that compare with DJ? Your staff (at least those over the age of 15) are quite giggly and insubstantial. It's one of the things that really puts me off your "airline" bigtime. Getting more business pax... well I wonder.

JQ will always get business through their parent, TR will get business through smart pricing, but where does it leave DJ? Between the Devil and the Deep Blue Sea, I suspect.

And, I didn't know JQ had A321's. Thanks for keeping me up to date.

[Yada Yada]

Hi, Dave,
As someone who has flown QF, JQ, DJ and TR recently. I think I can comment objectively.

I think DJ's biggest worry would have to be TR. They are a quality low-cost airline (backed by SQ), with well trained and courteous staff. How does that compare with DJ? Your staff (at least those over the age of 15) are quite giggly and insubstantial. It's one of the things that really puts me off your "airline" bigtime. Getting more business pax... well I wonder.

In more than 40 flights with Virgin Blue this year, I have never seen any cabin crew members resembling or acting like 15-year olds, none that are "giggly", and I don't actually know what you mean by "insubstantial". If you are talking about the way they look, then I agree - they generally aren't overweight.

DJ's cabin crew are courteous, professional, well trained and friendly. Is it perhaps the "friendly" bit that puts you off? The crews on QF are not as cheerful so maybe that is your point of reference?

[goldfishinabowl]

Someone in the other thread asked what terminal Tiger is flying into in Launceston. Was there the other day and the check-in desk is squeezed in between the Virgin check-in area and the southern arrivals gate. Would be very tight if a Virgin and Tiger flight were leaving at the same time, and another couple arriving.

[dajop]

Hi, Dave,
I think DJ's biggest worry would have to be TR. They are a quality low-cost airline (backed by SQ), with well trained and courteous staff. How does that compare with DJ? Your staff (at least those over the age of 15) are quite giggly and insubstantial. It's one of the things that really puts me off your "airline" bigtime. Getting more business pax... well I wonder.

JQ will always get business through their parent, TR will get business through smart pricing, but where does it leave DJ? Between the Devil and the Deep Blue Sea, I suspect.

I find DJ staff informal, but professional. It has been sometime since I experienced the giggly service on DJ. But each to their own. It is clear though that DJ have (by design) moved on from their LCC roots.

There is no way TT can (and they aren't trying to, yet) compete with DJ for the business market. They would need regular frequencies on trunk routes to even start competing.

[crazydave98]

JQ will always get business through their parent, TR will get business through smart pricing, but where does it leave DJ? Between the Devil and the Deep Blue Sea, I suspect.

Hi Clifford.

Tiger will always get leisure travellers through pricing - true (although question is whether they will get them at prices high enough to cover their costs which they have not been able to do yet in over 3 years - a business cannot run at a loss indefinitely - look at Ansett).

But we have made it very clear that we happy to let Tiger and Jetstar fight it out for who can offer the silliest fare while we focus on the business travel market. Some small businesses behave like consumers and shop around flight by flight. Large businesses on the other hand treat travel as an input to be procured and contracts negotiated, operating within a different framework. The triangle, where Virign Blue makes about half of its profit, is dominated by the traffic from large businesses. The drivers of choice in the large business travel market (triangle) are schedule frequency, connections, product (including frequent flyer program and Lounges), ticket flexibility, and price is further down the list. Tiger doesn't operate on the triangle (we operates 28 services a day SYD-MEL, 20 on SYD-BNE, 11 on BNE-MEL). They have no loyalty program or lounges (read AFF posts a few years back for declarations of "I will never fly VB until it has a frequent flyer program and lounges).

Let me illustrate why lack of frequency and 45 minutes checkin cutoffs are a barrier to business traffic. You are 5 mins late for check-in, still 40mins before scheduled departure when you could just be leaving your office for Qantas or Virgin Blue flight, or in The Lounge or Qantas Club for that matter, but you get cut off by Tiger's 45 minute limit. You them have to buy another fare at exhorbitant rates for another flight that probably won't leave for half a day if you're flying from MEL to NTL, ADL or OOL, or more likely the next day if you are flying to CBR, LST, HBA, PER, MKY, MCY or ROK where Tiger only has single daily services. Does your ticket still look cheap?

cheers

CrazyDave98

[wallacej]

In more than 40 flights with Virgin Blue this year, I have never seen any cabin crew members resembling or acting like 15-year olds, none that are "giggly", and I don't actually know what you mean by "insubstantial". If you are talking about the way they look, then I agree - they generally aren't overweight.

DJ's cabin crew are courteous, professional, well trained and friendly. Is it perhaps the "friendly" bit that puts you off? The crews on QF are not as cheerful so maybe that is your point of reference?

All I can say is, I agree (60 flights + this year)! It is refreshing at the start or end of the day to see young, fresh, happy staff... and I prefer it when they giggle and laugh... brings a smile to my face. It doesn't interfere with the service, and helps them enjoy their jobs!!

As opposed to QF, where I CAN NOT rememember the last time I saw a FA smile, or even look like they enjoy their job. Business travel does not have to mean, stiff upper lip, however if thats what a traveller prefers, QF has got that sorted. If you want your staff to be youthful, and actually appear to enjoy their jobs, then I chose DJ.