Before grounding Tiger showed signs of growing up

Tiger growing up.jpgA cub no more?



Before the Civil Aviation Safety Authority grounded Tiger Airways effective 1 July, the carrier was showing signs of operational maturity, although Tiger’s two low approaches in June and its subsequent grounding clearly indicate the safety side of the airline was deficient.

The positive operational signs were coming via a series of network changes that were giving critical short- and long-term perspectives about the carrier.

The network changes consisted of Tiger re-scheduling its Avalon-Perth flight to, in its words, “provide better timed…services”. It also opted to re-locate one Airbus A320 from Melbourne Avalon to Melbourne Tullamarine. While Avalon was able to better serve Victoria’s Geelong region, the bulk of traffic would find Tullamarine more convenient than Avalon.

Tiger also axed four routes: Melbourne to Mackay and Rockhampton, and Sydney to Brisbane and the Sunshine Coast. Then-managing director Crawford Rix said in a statement “These network changes will both streamline and simplify our Australian operations, enabling us to focus on combining our low fares with improved punctuality.”

Quietly added after that was that profitability to Mackay and Rockhampton was being affected by high fuel prices, and that a lack of a base in Queensland or New South Wales “has proved more challenging than anticipated”.

In the long-term, that period will be seen as when Tiger started to grow up by trading maximum utilization hours for reliability. The carrier was due to axe four routes while only adding one return Melbourne-Sydney service–and no more, a spokeswoman confirmed. “It’s about fixing reliability and flying the best routes to get our business on track,” she said. Unknown is if Tiger faced any other restrictions from its show cause notice besides not being able to induct more aircraft into service.

That net utilisation decrease would have given Tiger more schedule padding, decreasing delay dominoes and dampening the affects of when an aircraft goes tech. That would have resonated well with a public that has lamented Tiger’s reliability.

The move could also have been a prelude to Tiger trying to lure more of the corporate market as easyJet, for a global perspective, has done. While Tiger did have a tiny fraction of the corporate market, there was undoubtedly greater potential. Anecdotal evidence from corporate passengers shows they would fly Tiger more if its reliability was better–never mind the carrier’s ultra no-frills approach.

That said, the International Air Transport Association noted at its June AGM that aircraft utilisation was falling globally due to a decrease in demand, suggesting that perhaps Tiger was seeing that demand decrease too and was not just looking to improve reliability.

In the short-term, Tiger acknowledged it was finally feeling the tough Australian market that Virgin first felt in May 2010 with a profit downgrade. The announcement axing some Mackay and Rockhampton services was the first time the carrier mentioned fuel as having an impact.

Going forward it should be watched if Tiger continues to show signs of operational maturity while also satisfying CASA. Tiger is expected to resume operations with a limited service that in addition to complying with safety regulations will help operationally. (The carrier’s booking engine, at times, indicates Tiger will only fly to five cities from Melbourne upon service resumption.)

It remains to be seen if once CASA loosens the shackles and Tiger becomes under pressure to make up lost revenue if the carrier will go back to its old high-utilisation and low reliability ways, or if Tiger will embark on a slower path with bigger long-term gains.

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