Tigerair Australia
| Company type | Subsidiary |
|---|---|
| Industry | Airline |
| Founded | March 2007 |
| Founder | Tiger Airways Holdings |
| Defunct | September 10, 2020 |
| Fate | Brand discontinued after Virgin Australia Holdings acquisition by Bain Capital |
| Headquarters | Melbourne , Australia |
Area served | Domestic Australia; previously some international routes to Bali |
Key people | Crawford Rix (Managing Director, from 2010) |
| Products | Budget airline services |
| Parent | Virgin Australia Holdings (from 2013) |
Tiger Airways Australia Pty Ltd, known commercially as Tigerair Australia, was an Australian budget airline established by Tiger Airways Holdings, beginning its domestic flight operations on 23 November 2007. It eventually became part of Virgin Australia Holdings as a subsidiary. Operations were halted on 25 March 2020 in response to the COVID-19 pandemic. After Virgin Australia Holdings entered administration and was acquired by Bain Capital, the new owner confirmed the discontinuation of the Tigerair brand.
History
Australian regulations allow airlines with full foreign ownership to operate domestic flights, which enabled Tiger Airways Holdings to launch a wholly owned Australian subsidiary in March 2007 without restrictions. Tiger Airways Australia Pty Ltd was registered in the Northern Territory but headquartered in Melbourne, using Melbourne Airport as its primary hub.
The airline invested five aircraft and $10 million to commence operations, adopting a low-cost carrier strategy similar to its Singaporean counterpart. The focus was on growing market share, managing operational expenses, and maximizing route coverage. To maintain low costs, the airline initially avoided high-cost airports.
Following regulatory approval and demonstration flights in November 2007, Tigerair received its Air Operator's Certificate on 22 November. Its inaugural scheduled flight took off from Melbourne to the Gold Coast on 23 November 2007, operating solely from Melbourne Airport at that time.
In May 2008, Tigerair implemented charges for checked baggage. By April 2009, it had announced plans to enter the highly competitive Melbourne–Sydney corridor, abandoning its previous strategy of avoiding expensive airports. The airline expanded services between major cities and launched Brisbane routes by November 2009.
In February 2010, Tigerair reported it had turned profitable. Leadership transitioned with Crawford Rix replacing Shelley Roberts as managing director, placing greater emphasis on punctuality. Mid-2010 saw the withdrawal of services from Launceston and the Adelaide–Hobart route, while new routes to Cairns were introduced and the Melbourne fleet was augmented with additional Airbus A320 aircraft.
Towards the end of 2010, Tigerair declared intentions to expand onto the Sydney–Brisbane route, completing its 'golden triangle' network connecting these key cities. In March 2012, it reestablished a base at Sydney Airport and resumed flights between Melbourne and Adelaide in November.
Virgin Australia Holdings announced in October 2012 that it would acquire a 60% stake in Tigerair, finalizing the purchase in July 2013 with a rebranding to Tigerair Australia. The airline broadened its network by adding direct flights from Mackay to Melbourne and Sydney and reinstated services linking significant regional centers.
In October 2014, Virgin Australia acquired the remaining 40% of Tigerair for a nominal $1 while maintaining the brand and retaining rights for some international routes. Starting March 2016, Tigerair launched international services from Melbourne, Adelaide, and Perth to Denpasar (Bali).
In August 2015, Tigerair relocated operations to Terminal 4 at Melbourne Airport, upgrading passenger facilities with automated check-in systems and expanded amenities. It also increased flight frequencies between Melbourne and Coffs Harbour.
The airline resumed Canberra–Melbourne services in December 2016 but discontinued Bali flights in February 2017 due to regulatory constraints. In September 2017, it inaugurated a new route connecting Canberra and Brisbane.
Virgin Australia restructured its management in September 2019 by integrating Tigerair's operations under group leadership and eliminating the CEO role specific to Tigerair.
In February 2020, Virgin Australia Holdings announced a reduction of Tigerair’s fleet from thirteen to eight aircraft alongside cutting five unprofitable routes and closing its Brisbane base. Operations were suspended on 25 March due to the COVID-19 outbreak; pilots were subsequently made redundant. Following Virgin Australia's administration process and sale, Bain Capital confirmed that the Tigerair brand would be retired. Official discontinuation occurred on 10 September 2020; however, the Air Operator's Certificate was preserved for possible future use.
Following Tigerair’s exit from the market, carriers such as Rex Airlines and Bonza attempted to occupy its former market segments but encountered financial hardships leading to Bonza’s liquidation and Rex entering administration by mid-2024. The Transport Workers Union of Australia has described this ongoing instability within the sector as a crisis.
Competitors' responses
The entry of Tiger Airways Australia into the market elicited diverse reactions from key rivals, particularly Qantas and its subsidiary Jetstar, as well as Virgin Australia. Alan Joyce, Jetstar's CEO, dismissed Tiger's efforts as inconsequential, highlighting that Tiger had incurred losses exceeding SGD$60 million during two years of operation in Singapore.
In retaliation, competitors reduced airfares through promotional campaigns. Jetstar committed to a "double the difference" guarantee if a competitor offered a cheaper fare, supplemented by loyalty incentives. Tiger Airways aimed to introduce "single-digit" one-way fares, with flights priced at $80 between Melbourne and Darwin, which drew criticism from Jetstar.
Virgin Australia evaluated the possibility of launching its own low-cost carrier to compete with Tiger. After Tiger announced plans to establish a hub at Melbourne Airport to attract budget travelers, the airport responded by lowering usage fees. Tiger’s potential expansion into New Zealand also raised apprehensions within that market.
Shortly before Tiger’s Australian debut, Jetstar released 5,000 seats priced at five cents each across seven domestic routes, with a cost of $25 per seat. Jetstar maintained that this offer was unrelated to Tiger’s launch but acknowledged them as a notable competitor.
On 23 November 2007, Tiger publicly criticized Qantas for refusing ground handling services at Alice Springs Airport, which delayed Tiger’s launch there by three months despite their willingness to cover associated expenses. Qantas executive John Borghetti stated that assisting competitors was beyond his obligations.
Tiger celebrated its first anniversary on 19 November 2008 by launching a "Free Seats" promotion featuring 100,000 seats, half of which sold out within hours. Its second anniversary on 23 November 2009 included offering thousands of seats for just $2.
Ownership
Tiger Airways Australia was initially established by Tiger Airways Holdings. In October 2012, Virgin Australia Holdings agreed to acquire a 60% share in Tigerair Australia for $35 million, with plans to invest up to $62.5 million to expand the fleet from 11 to 35 aircraft by 2018. Following this acquisition, Tigerair operated as Virgin Australia’s low-cost subsidiary. The Australian Competition & Consumer Commission (ACCC) approved this purchase on 23 April 2013, noting that Tigerair’s continued presence in the market was unlikely without it. In October 2014, Virgin Australia Holdings completed the purchase by acquiring the remaining 40% stake.
Performance
During the 2012–2013 period, Tigerair recorded the second-lowest on-time departure rate among major Australian domestic carriers at 79.6%, a decline from 89.5% the previous year but still outperforming Jetstar’s 75.6%. The airline’s on-time arrival rate was slightly superior at 76.3%, compared with Jetstar’s 76.1%. Additionally, Tigerair boasted the lowest cancellation rate at just 1.2%.
By 2015, Tigerair had enhanced its punctuality performance, achieving an on-time departure rate of 84.1%, setting a company record and surpassing a key competitor’s 76.2% on comparable routes. Cancellation rates on these routes were threefold lower for Tigerair at 0.9%, compared to 2.9% for its main rival. In February 2016, Tigerair attained its highest monthly on-time departure rate of 93.3%.
2011 warnings and suspension
On 11 February, there were suspicions of inaccurate data within a flight computer system.
On 3 March, a traffic collision avoidance system warning was activated after one of Tigerair's A320 aircraft approached dangerously close to a smaller plane. Subsequently, Tigerair received a "show-cause" notice concerning pilot training and maintenance standards. Spokesperson Vanessa Regan reassured passengers that there were no safety risks and normal operations continued.
Throughout June and July, several incidents involved Tigerair planes descending below minimum safe altitudes near Melbourne and Avalon Airports and flying too near other aircraft.
On 2 July, the Civil Aviation Safety Authority (CASA) suspended Tigerair Australia citing multiple safety concerns. This suspension impacted approximately 35,000 passengers during peak school holiday periods and was estimated to cost the airline $4.2 million weekly.
CASA imposed stringent conditions on Tigerair’s Air Operator Certificate, mandating pilot instrument rating renewals within two months. CASA representative Peter Gibson emphasized that the airline had failed to demonstrate safe operational capabilities due to systemic problems.
Tigerair fully cooperated with CASA's investigations but halted ticket sales on 5 July amid uncertainty regarding flight schedules.
On 6 July, CASA applied to extend the suspension until 1 August via the Federal Court pending additional safety assurances.
After five weeks of grounding, CASA lifted restrictions on 12 August permitting limited operations with up to 18 daily flights between Melbourne and Sydney. Concurrently, Tigerair discontinued services from Avalon Airport and shut down its Adelaide base as part of a commercially driven restructuring plan that reduced its fleet size to eight aircraft.
On 22 October 2012, CASA issued a renewed safety certificate confirming full restoration of Tigerair Australia's operational status after all safety criteria were met.
Television series
The Air Ways program broadcast by the Seven Network highlighted the daily workings of Tigerair Australia, akin to the British show Airline. While it occasionally portrayed the airline in a less favorable light, it nonetheless served as a promotional platform until its discontinuation in 2012 due to insufficient viewer interest.
Base growth
Tigerair Australia recommenced its services in Melbourne in 2011. Subsequently, it established a second operational base at Sydney Airport in July 2012, followed by a third base at Brisbane Airport in March 2014.[1]
International routes
In March 2016, Virgin Australia delegated its short-haul international routes connecting Melbourne, Adelaide, Perth, and Denpasar (Bali) to Tigerair. These flights utilized three Boeing 737-800 aircraft on a wet-lease arrangement from Virgin Australia, with Tigerair supplying the cabin crew.[2] Due to regulatory complications in Indonesia, Tigerair discontinued its Bali services in February 2017.[3]
Tigerair became a member of Value Alliance, the largest low-cost carrier consortium, on 16 May 2016. This alliance included airlines from the Philippines, South Korea, Thailand, Singapore, and Japan. Tigerair withdrew from the alliance in 2018.
In November 2016, Tigerair applied for authorization to broaden its international operations under its own air operator's certificate utilizing A320 and 737 aircraft.Cite error: The opening <ref> tag is malformed or has a bad name
As of March 2020, Tigerair operated flights to seven destinations:
Fleet
In July 2016, Tigerair Australia declared its plan to phase out the entire Airbus A320 fleet in favor of Boeing 737-800 aircraft within a three-year timeframe.
By the time operations ended in March 2020, Tigerair Australia's fleet consisted of:
| Aircraft | Quantity | Seating Capacity | Remarks |
|---|---|---|---|
| Boeing 737-800 | 6 | 186 | |
| Airbus A320-200 | 7 | 180 | Seven units had been retired prior to the cessation of services. |
| Total | 13 | ||