Where have I seen this before....
18 months later => Sydney and Brisbane.
Tiger vows to shun high-cost airports
Steve Creedy | November 02, 2007
MAJOR airport operators have received a blunt warning from Tiger Airways chief executive Tony Davis that the airline will bypass them if they do not fit its low-cost model.
Mr Davis said this week the conventional wisdom that any new domestic entrant needed to fly the Brisbane-Sydney-Melbourne "golden triangle" did not apply to Tiger.
The warning comes as Tiger returned its landing slots at Sydney for the northern winter schedule and instead opted to operate from Newcastle.
Mr Davis pointed to dedicated low-cost facilities at Melbourne and Singapore's Changi Airport as good examples of where Tiger could service major airports without compromising its model.
He said the airline -- which has now announced 12 destinations after adding Newcastle, Canberra and Hobart to the list -- was keen to fly to all airports around Australia where its model could work successfully.
"But what we're not prepared to do is go into airports where we don't believe the model will work in its current form and try and compromise by charging people higher fares to offset either the costs of the lack of efficiencies that we might encounter," Mr Davis said.
"We're absolute purists when it comes to the low-cost model, and that means that if there are airports that we can't make work then we won't serve them."
Asked specifically about Sydney, Mr Davis said Tiger had not reached a position where it believed the nation's biggest port would work for it.
It was still keen to work with Sydney, and obviously if there was a way for it to operate to the airport it would.
"But it's not a case where the conventional wisdom that says if you're going to be a major airline in Australia you've got to serve Sydney, Melbourne and Brisbane is necessarily accurate any more," he said.
Mr Davis said a big difference was that while Australia was an important component in its network, and one it was keen to develop, it was not the only thing it had going.
He noted that at the same time the airline was announcing its new Australian destinations it was also launching its first flight to India and its fifth to China.
This meant that if certain airports in Australia did not work for it, it had other opportunities domestically and internationally.
"We haven't got all our eggs in one basket, we can spread the aircraft around the region and we will fly to as many airports in Australia as we can make work," Mr Davis said.
"We've already announced 12 destinations before we even start flying and there are many more airports that are keen to get us to commence services.
"But if it comes down to compromising the model or putting the aircraft into other parts of the Asia-Pacific region, to me it's a no-brainer: the aircraft will go somewhere else."
Tiger Airways is starting its Australian operations with five aircraft operating on a national network from its Melbourne hub.
Mr Davis indicated he had made a decision about putting additional aircraft into the market, but added: "I'm not ready to share that with you yet.
"We've got potential to grow our fleet from the current 12 to 72 over the next nine years or so and we'll bring as many of those aircraft into Australia as we think we can operate efficiently and profitably."
The airline caused a stir this week by launching its Canberra, Newcastle and Hobart routes with $9.95 tax-inclusive, one-way promotional fares.
Newcastle is the airline's first destination in NSW and is already serviced by Jetstar and Virgin Blue.
But Mr Davis was unfazed by the competition, reiterating claims that the new airline would have a lower cost base and offer lower fares than its competitors.
He also said he believed that destinations such as Newcastle could help reinforce Melbourne's position as a viable international gateway.
"I think what you're seeing in NSW is that an airport like Newcastle, that historically was served by turboprops and was really considered a regional airport, is now firmly establishing itself as an airport for low-cost carriers like Tiger," he said.
"And you've seen that happen in Europe, where airports that were also in the shadow, if you like, of major airports have changed their business model to suit low-cost carriers and have expanded very rapidly.
"People have been making the point, even today as we've announced services, that for those people who do live north of Sydney there's now an alternative which says you can drive to Newcastle, park your car adjacent to the terminal at significantly lower rates than you would do at Sydney Airport, fly down to Melbourne and really get anywhere in the world from Melbourne."