Tiger Airways outlines Oz expansion plans

Tiger Airways has told analysts in Singapore this afternoon that it is now advancing as Australian carriers retreat.

It also had international services by its Australian division ‘on the radar.’

Its president and CEO Tony Davis said the 16 jets in its fleet (10 in Singapore and 6 in Australia) will grow by 56 more single aisle A320s in the medium term.

Davis gave an upbeat presentation made even more so by not mentioning how much money it has lost either for the year, or the 31 March quarter, which he was reviewing.

The Q and A session still underway may cast some light on its financials but no one covering air transport in this hemisphere expected it would be making money.

The real value in this afternoon’s update is the chance to gauge the Singapore Airlines controlled low cost carrier’s commitment, and it didn’t blink.

A rapidly expanding Tiger seems as near a certainty as anything can be in the airlines game, and for this market this really gains momentum from 3 July when it begins serving the Sydney-Melbourne route.

The key disclosed metrics are captured in these two screen grabs from the presentation just over.

Davis’s reference to international routes infers that the Australian division could seek investment partners that would give it flag carrier status and access to them under most bilaterals by defining control as being 51% controlled in this country.

It will also add to the discussion that Qantas has been pursuing for many years that control should be defined not by residency of shareholding, but by the nature of the management, its HQ location and the home of its assets (in so far as you can nail down fleets of course.)

The thought that Tony Davis and Alan Joyce, the Qantas CEO, might actually find themselves on the same side of this argument could curdle the late night chocolate at Joyce’s Coward Street bunker in Sydney.

But nothing is all that surprising in airlines.

In the last year Davis has several times said he favoured Tiger Airways entering the Australia to Japan and New Zealand markets. It’s current rather indirect links to Singapore are by A320s flown by that division.

Tiger launching to Japan or New Zealand would start a ferocious brawl with Qantas’s Jetstar subsidiary, and in the latter case, quite possibly over the carcass of Air New Zealand, which somehow needs to escape from NZ Government ownership and get seriously refinanced, however implausible this seems at the moment.

Wellington’s long free trade commitment to aviation has seen Air New Zealand hunted into a corner by Pacific Blue, Virgin Blue’s local subsidiary, and Jetstar. But the Kiwi flag carrier is fighting back hard.

All that is needed to complete the Tiger picture today is a word or two about the bottom line. But in the context of being seen as Singapore’s instrument for driving itself an advantage in a trauma induced rationalisation of the industry in this corner of the world, focusing on how much it looses would be to miss the point.

This graphic also summarises Tiger’s view of the jungle as air traffic liberalisation spreads wider.