Tiger decision day- April 24.

[wheels_down]

Finally some closure for alot of people out there.

Lets hope Mr Koay Peng Yen does now shut it down if its knocked back. But unfortunately it will be the case as they have no chance of building scale in the current climate without a major partner. They seem to be more interested in Thailand and Indonesia.

Good luck to all there.

ACCC resets the clock on Virgin-Tiger deal


Australia’s competition authority the ACCC has restarted the countdown on the Virgin Australia-Tiger Australia deal, setting 24 April as decision day.
It is also dealing with calls by Emirates and Qantas for what could be summarised as fairness and consistency (http://www.smh.com.au/business/emirates-counters-virginair-nz-deal-20130415-2hw2v.html) in relation to approvals for multi airline marketing deals on the Australia-New Zealand market.
Each application carries profound implications for the state of airline competition in Australia and the role of the ACCC in situations where airlines willingly set out to flood the market with excess capacity and wage unsustainable fare wars.
At its most basic the Tiger issue is about whether or not Virgin Australia is permitted to have a second low cost brand in the market similar to Qantas having the low cost Jetstar brand which it devised in 2002-2003 and put into operation in 2004 to counter the expansion of what was then branded as Virgin Blue.
In reality the issue is more complex, and has been called into doubt by the ACCC over competitive questions which have caused it to call for additional submissions from Virgin Australia, which it received on 11 April.
Virgin Australia is seeking to buy a 60% stake in Tiger Australia’s business and run it as an entirely separate brand with no marketing linkage to its full service product, which differs from the Qantas-Jetstar arrangement in one material element in that the latter is co-marketed with the Qantas product offering.
Tiger Australia’s Singaporean owner, Tiger Airways Holdings, has made it clear that the losses experienced by its Australian franchise are unsustainable.
It may close Tiger Australia if Virgin Australia is unable to finalise the purchase through lack of regulatory approval, and the ACCC has acknowledged that this possibility is of considerable importance to its deliberations, causing it to pause the previous target date of 18 March for a decision on the Virgin Australia application.
The core issue in the trans Tasman applications and submissions being heard by the ACCC is whether or not it should compel airlines to continue to offer excessive capacity where the airlines start a fare war which however damaging to the parties, results in substantial and longer term low fare benefits to the Australia-New Zealand market.
Or in short, should the ACCC prevent airlines from finishing something they started?
When the ACCC approved the Qantas-Emirates business partnership which took effect on 31 March it excised from the approval the proposed ‘coordination’ of fares and capacity on the trans Tasman routes by both carriers. It required them instead to maintain their current service levels, which are widely known in the airline game to be variously ruinous or very marginal.
Since then the dominant trans Tasman combination, between Air New Zealand and Virgin Australia, which has the approval of competition authorities on both sides of the Tasman, has sought permission to ‘vary’ its capacity obligations between Australia and New Zealand, which has now been objected to by Emirates and Qantas on the basis that the ACCC’s ruling on this issue should be consistent for all the interested parties.
In simple English, that is the same as the four key competitors on the Tasman all calling ‘enough’ and pleading for permission to act in concert within their partnerships to end the bleeding by cutting the number of flights they offer, which in turn would force fares to rise to what the airlines regard as ‘sustainable’ levels.
Which also, in simple English, means rigging the market, which is precisely the type of anti-competitive activity the ACCC is charged with preventing.
This sets up the ACCC to have to choose between forcing carriers to continue losing money (as they claim) or allowing them to conspire to screw the market.
It is an incredibly testing dilemma for the competition regulator, because if the airlines were to be allowed to slash capacity and raise fares they may inadvertently collapse demand for air travel between Australia and New Zealand, which is currently running at unprecedented levels and generating substantial economic benefits on both sides of the Tasman by stimulating tourism and its dependent jobs.

[KRUSTY 34]

Must be a stressful time for Tiger OZ employees.

Personally I had a bad feeling when JB backed away from the comittment to expand TT to the level required for it t become viable. A comittment that will cost VA many millions of dollars!

International competition may be an issue for the ACCC, but it all becomes academic if the airline is unable to secure the resources required for it to become profitable. Perhaps an ACCC facilitated exit strategy?

Hope I'm wrong. :(

[flying.monkeyz]

I hope they shut it down and redeploy the aircraft back to Singapore.

[XRlent320]

Why's that flying monkeyz? So you can get a quick command?

Try using a bit of sensitivity, put yourself in the shoes of the 300 or more
Pilots/FA's office staff who would be affected by such a move.....

[KRUSTY 34]

Name says it all doesn't it. :rolleyes:

[tourismman]

I think it will be OK.
Tiger provides competition and it would be a bad move by the ACCC if they did not allow the Virgin takeover.

[Roller Merlin]

My spies tell me it is already a done deal

[DUXNUTZ]

Which way?

[Watchdog]

Correct me if I'm wrong, but did QF not buy Impulse in 2001 thereby removing a competitor in the market? Precisely the same scenario as the VA/TT situation that the ACCC is baulking at :=

[Beer Baron]

Watchdog, the difference would be that when Qantas acquired Impulse, Ansett was still flying and Virgin was growing. Hence there were still 3 independent domestic airlines compeating after the loss of Impulse from the picture.
If Virgin essentially acquires Tiger then we return to a airline duopoly situation.

[Watchdog]

Yes BB true, so 3 is OK but 2 is not. And the regionals don't count. Might be a good opportunity for more airlines to start up. Clearly there is a market for more than 2 major carriers eh? Historically all new players have prospered and made mega-bucks....oh, hang on? :uhoh:

Could be worse, we could have a monopoly like CASA who charge $75 to process a medical and $25 to print/post a copy of a FC licence! :rolleyes:

[wheels_down]

Interesting that Tiger are now using Virgin's gates at Sydney.

[Fuel-Off]

Thought they always did? :confused:

Fuel-Off :ok:

[GAFA]

They have always used the Virgin gates, it's in the lease agreement VAA have with SCAL.

[ASY68]

I would say on the word of a good informantthat there are some great things about to happen.

XFA

[EK_Bus Driver]

Do you mean great things for TT??

Hope so for the 300 or so jobs at stake....:confused:

[TexanPilot]

Hopefully good news for the people at Tiger. Must have been hard having this hang over them for the past few months.

Fingers crossed and good luck.

[somewhereat1l]

Joint venture just confirmed

[ASY68]

ACCC to not oppose Virgin Australia?s proposed acquisition of 60% of Tiger Australia | ACCC (http://www.accc.gov.au/media-release/accc-to-not-oppose-virgin-australia%E2%80%99s-proposed-acquisition-of-60-of-tiger-australia)

[74world]

GREAT NEWS !!!!!! :ok:

[goodonyamate]

granted, I'm not completely familiar with the details, but how will this affect the virgin drivers? can we expect to see va be replaced on some routes by tt? similar to what jetstar did to QF? any opportunities for those va guys close to a seat change that will now miss out due to the expansion of tiger?

[TexanPilot]

Congrats to those at TT. Must be a relief knowing that your jobs are now safe.

Also good for aviation scene in Australia. Probably the only movement this year.

The way I understand it the 2 companies are going to be operated as separate entities but I could imagine that TT will be put on the more "leisure" routes and VA will be put as pure premium carrier.

[hotnhigh]

I'm glad tiger guys and girls have some certainty for their futures.
I just hope that virgin management don't see the spreadsheet advantage of carving up certain parts of the operation and do a jetstar on the vb operation.

[The Green Goblin]

JB might not, but the next guy will.

As long as executive management are KPI driven with part of that reducing costs, the temptation will be to do a exactly that/

[neville_nobody]

granted, I'm not completely familiar with the details, but how will this affect the virgin drivers? can we expect to see va be replaced on some routes by tt? similar to what jetstar did to QF? any opportunities for those va guys close to a seat change that will now miss out due to the expansion of tiger?

Could result in some shrinkage of Virgin if this article is anything to go by

Australian travellers are set to realise how good they've had it flying on domestic routes.

After an era of super cheap fares, they face a small amount of pain from the competition regulator freeing up Virgin Australia to forge ahead with its bid for a controlling stake in Tiger Australia.

The decision to allow the removal of an independent third player in Tiger means the fast-paced growth in capacity in the domestic market is set to slow. That will reduce the need for the country's airlines to dump fares in order to fill seats on their planes.
Advertisement

The effective takeover of Tiger Australia will remove the chance of the budget airline making irrational business decisions, such as launching new routes it had no chance of turning a profit on.

Once it finalises the acquisition, Virgin is likely to shift Tiger away from the main routes – such as Sydney-Melbourne – to those focused on flying holidaymakers to their destinations.

Since launching flights here in 2007, the Singapore Airlines-backed Tiger has been a constant pest for Virgin and Qantas's budget offshoot, Jetstar – and duly forced them to respond in lowering fares.

But before passengers fire angry emails to the Australian Competition and Consumer Commission, it is important to consider the alternatives to it giving the green light to an effective return of this country's aviation industry to a duopoly between Virgin-Tiger and Qantas-Jetstar.

Tiger has notched up losses of more than $216 million in less than six years. And its Singapore parent had made it clear it would pull out of Australia if the bid was blocked.

Competition tsar Rod Sims faced scoring an own goal. He could have knocked back Virgin's bid on the basis of a potential lessening in competition, only to find the third independent player pack its bags for home.

While the super cheap fares on key routes might be coming to an end, it is important to bear in mind that the airlines cannot return to an era when gouging of travellers was the norm. A glut in capacity remains with Australia's domestic market growing this year by between 5 and 7 per cent.

The airlines, too, make a fair point that the fare wars at both ends of the market are unsustainable in the long term, and a return to moderation is not only in their interest but those of the country in the long run.

The question now is what will be the finer details of Virgin's plan to create a Qantas Mini-Me.

Virgin chief executive John Borghetti faces a big task because he has so many balls in the air.

Not only does he have to put Tiger back on the path to profitability, but he has to manage the takeover of West Australian airline Skywest and forge ahead with turning Virgin into a true upmarket competitor to Qantas. All of these tasks will chew up management's time.

Tiger's brand was also severely damaged in the eyes of many travellers after the air-safety regulator grounded its operations here for five weeks in 2011 due to safety concerns.

Borghetti is of the view that leisure passengers are more quick to forget provided both the cheap fares and the safety of the airline remains.

While the serial pest has been removed, the Tiger takeover will allow Borghetti to create a more credible competitor to the dominance of Qantas-Jetstar.

That can't be a bad thing for travellers.

Read more: Virgin-Tiger deal: short-term pain, long-term gain (http://www.smh.com.au/business/virgintiger-deal-shortterm-pain-longterm-gain-20130423-2iby5.html#ixzz2RGH6LL56)

[neville_nobody]

Maybe the ACCC should be looking at airports if they want more independent airlines in this country. Nothing will change unless we dispose of the monopolies of the capital city airports.

ACCC TO NOT OPPOSE VIRGIN AUSTRALIA’S PROPOSED ACQU
ISITION OF 60% OF TIGER AUSTRALIA

The Australian Competition and Consumer Commission
(ACCC) has announced that it will not oppose the proposed acquisition by Virgin Australia Holdings Limited (Virgin Australia) of 60% of Tiger Airways Australia Pty Ltd (Tiger Australia).

Virgin Australia is the second largest domestic airline operator in Australia, behind the Qantas Group. Tiger Australia is a domestic airline that commence
d operations in November 2007 and currently services 16 domestic routes with 11 aircraft. Tiger Australia operates under a low cost carrier model which primarily focuses on price sensitive leisure travellers.

“The ACCC’s view is that this acquisition is unlikely to lead to a substantial lessening of competition in the Australian market for domestic air passenger transport services,” ACCC Chairman Rod Sims said.
“Essential to reaching this view was the ACCC’s assessment, made after thorough and extensive testing of the issue, that Tiger Australia would be highly unlikely to remain in the local market if the proposed acquisition didn’t proceed. Absent this conclusion the acquisition raised considerable competition concerns. “In making this assessment the ACCC had particular
regard to Tiger Australia’s history of poor financial and operational performance. In six years in Australia, Tiger has never made an operating profit, and its current losses are large. These losses remain a big drag on the
entire Tiger group,” Mr Sims said. “The ACCC also tested the likelihood of Tiger Australia’s performance being improved by either its current owner (the Singapore-based Tiger Airways Holdings Limited) or other potential shareholders or joint venture partners if the proposed acquisition did not proceed. The ACCC considered it unlikely given the current circumstances that Tiger Australia would be turned around under any of these scenarios to provide vigorous competition as an independent operator. Instead its key assets, being the 11 Airbus aircraft, would very likely be redeployed into the Asian operations of its parent company.” “The ACCC would always prefer to see a greater number of independent airlines competing in the domestic market. However, our investigations showed that Tiger Australia had been
unable to establish itself as a viable competitor despite substantial investment and numerous changes of management and strategy over the years.

We concluded that it was highly likely that Tiger Australia would leave the market if this acquisition didn’t go ahead, and accordingly blocking the acquisition would not serve to protect competition,” Mr Sims said.
“Virgin Australia now has the opportunity to pursue its stated objective of transforming Tiger Australia into an effective competitor to Jetstar for price sensitive travellers.”

The ACCC consulted widely with a range of interested parties, including other airlines, airports, tourism organisations and industry bodies throughout the course of its review

[MASTEMA]

Excellent, leisure layovers!

[Sand dune Sam]

What would be more plausible is leaving the Virgin Australia network alone, and deploying Tiger in Asia from bases like Darwin to take on Jetstar in Asia? Can't see Borghetti or anybody else for that matter cannibalising a brand they have strived hard to build up..just my observation.

[ACT Crusader]

Interesting that Tiger are now using Virgin's gates at Sydney.

They have always used the Virgin gates, it's in the lease agreement VAA have with SCAL.

See it's posts like these that make this forum so great :)

The decision doesn't seem all that surprising from a competition regulator given Tiger was providing very little competition. When they first arrived they were like the brand new IGA that provided some good things at a good price, but now they're like the struggling milk bar that barely sees a customer and is losing money trying to offer something they couldn't afford to (domestically)

[KRUSTY 34]

Great news for TT OZ employees.

The ACCC were between a rock and a hard place on this issue, and have been pretty much saying it for some time. Hopefully now the deal has been given the green light, VA will move quickly to improve the TT bottom line.

I can't imagine acquiring 60% of an entity and allowing it to run at a loss for too long.

My two bobs worth: Crewing wise, the biggest movers in the foreseeable future will be the ATR regional, and demand for Domestic drivers for an expanded TT OZ.

Now if Jetstar ever gets it's crewing act together, some of the regional airlines just might have to reassess their crew retention policies. Those who actually have policies that is:E

[bubble.head]

some of the regional airlines just might have to reassess their crew retention policies. Those who actually have policies that is

I like your train of thought Krusty!

I am wondering whether there will be a gentleman's agreement in place in not poaching each other's drivers.

[KRUSTY 34]

Doubtful BH. I imagine the challenges ahead for VA would take priority over any "Gentleman's Agreement" with another carrier!

As far as retention of pilots from some of the second level operators go, I think we all know the answer to that one.

Buckle up guys. Interesting times again.

[neville_nobody]

My two bobs worth: Crewing wise, the biggest movers in the foreseeable future will be the ATR regional, and demand for Domestic drivers for an expanded TT OZ.

Assuming that there is no contraction of Virgin's operations. If Tiger replaces Virgin in some ports there won't be much gain unless Virgin expand either overseas or interstate. I can't see them expanding Tiger, whilst shrinking Virgin and leaving guys sitting around like QF does.

If Virgin and Tiger expand then the regionals are going to really start hurting and you might even find guys punching out of Jetstar. If that happens it might be the old pilot shortage again.......:ok:

[Compylot]

Hi all,

A friend of mine who had been through the Virgin selection process last year (and was waiting for a start date) was called up late last week and asked if he could attend a Tiger interview.

I was wondering if anyone has any info on the Tiger selection process, interview, sim, psychometric etc? Is it similar to the Virgin process?

Also what they are like to work for, pay, lifestyle? He has been overseas for a few years and has quite a few hours on the airbus and was wondering how long he would have to wait for a command?

I've used the search function but haven't found anything current.

Any info much appreciated.

PM me if you like.

Thanks in advance :ok:

[VH-FTS]

Good windup Compy, we're on to you these days! :ok:

[FYSTI]

Yes, you would have expected Compylot to have done the honourable thing and changed hand[le]s!

[Pedota]

From the Fairfax website . . .


Qantas Exec to Lead Tiger

Qantas executive Rob Sharp has been appointed to run Tiger Australia, the low-cost airline confirmed this morning.

Tiger recently received regulatory approval to sell 60 per cent of the company to Virgin Australia.

Mr Sharp was the global head of commercial airport infrastructure and services at Qantas.

More to come.

[training wheels]

From the Fairfax website . . .

Head hunted by JB perhaps?

[wrongwayaround]

The virgin group are collecting quite the talent pool!

Do you suppose himself and JB are Oldmates ?

http://blogs.crikey.com.au/planetalking/2013/04/29/former-qantas-executive-to-head-tiger-australia/

[fishers.ghost]

Former Qantas exec to lead Tiger Airways - The West Australian (http://au.news.yahoo.com/thewest/business/a/-/national/16926451/former-qantas-exec-to-lead-tiger-airways/)
Mr Sharp will replace Andrew David, who left Tiger in March for a role at Jetstar.....ROFLMAO

[B772]

I see Tiger in Aust are only loosing an average of $1M per week now.