What’s going on at Tiger

[wheels_down]

Since the start of this year the business has crashed operationally. Every month that passes the numbers are getting worse. Current departure target is low 60%. Looking at the numbers for this week, most days a quarter of the flights are 3-5hrs late.

Blunty might be long gone but I’ll give him credit he did one thing when he walked into it, fix its OTP. And he had it at a steady 80 even upward of 90.

MM too busy over at Virgin?

[Chadzat]

MM trashed VARA’s operational record and now she is doing the same at TT!

[Arthur D]

Last I checked, it still ain’t super. Clearly MD not flash either.......

[The Bullwinkle]

Catering debacle, maintenance debacle and yet she still retains her position.
She must have friends in high places. :rolleyes:

[No Idea Either]

We are sooooooooooo lucky she didn’t get the main gig at VA. Would have been a disaster:rolleyes:

[machtuk]

Some 3 odd years a ago when the powers to be said we are going all Boeing that was the day the first nail was driven home in Tigers coffin, the lid is being slowly nailed closed! A burial is inevitable as they stand now!

[wheels_down]

Tiger Singapore are in the progress of switching its current fleet out to the Neo.

What a great chance to nab these aircraft. Skytraders are taking some as they are only 10 years old.

Tiger Oz could take some and piss off the 737. Blame blunty for the mess all is good.

[machtuk]

Tiger Singapore are in the progress of switching its current fleet out to the Neo.

What a great chance to nab these aircraft. Skytraders are taking some as they are only 10 years old.

Tiger Oz could take some and piss off the 737. Blame blunty for the mess all is good.

You speak the truth more than you realise, IF Tigers survive as they are now!......Airbus, way of the future!

[wheels_down]

Tiger is much like Masters. Nothing but a financial drain and management distraction.

A token fleet of a dozen odd aircraft will never be a solid contributor to the group. What PS is trying to do is boost Virgin’s foundations to essentially bullet proof it against ongoing market and fuel headwinds.

Tiger can’t do much should fuel rise. The risk here is what has happened in the past, when fuel went above one hundred, Tiger was losing fifty to sixty million.

If MM can’t fix it then nobody can :}

[Rated De]

Tiger can’t do much should fuel rise. The risk here is what has happened in the past, when fuel went above one hundred, Tiger was losing fifty to sixty million.


This is precisely the problem with Low Fare Airlines: Very demand elastic and fuel price changes kill their demand.

As their target customer is fare conscious, they are price sensitive. Thus, Tiger (like Low fare airlines) can try to yield build by gently raising prices.
Should fuel price increases impact their cost structures, they find rising costs (with fuel price) combines with falling demand (a result of higher gasoline pump prices) generate the negative dual shock.

[Buster Hyman]

Tigerair Taiwan going NEO as well. Seems to be a trend...

https://www.flightglobal.com/news/articles/tigerair-taiwan-to-take-15-a320neos-460342/

[Berealgetreal]

VARA and Tiger merged with the Tiger basically being the east coast VARA 320 Op? Probably a whole lot more complex than that! Not a bad rumour though.

[SilverSleuth]

VARA and Tiger merged with the Tiger basically being the east coast VARA 320 Op? Probably a whole lot more complex than that! Not a bad rumour though.

More a rumour that i hear coming and started from the Tiger Pilots themselves, who just prey for a reverse decision to go back to the 320.
At least with the max deferment the 320 will hang around a little longer but i think it is only delayed IMHO. Who knows however, old mate at the top now (PS), may change his mind and his predecessor decisions. (but he would have to convince the board who approved it in the first place)

[AerialPerspective]

We are sooooooooooo lucky she didn’t get the main gig at VA. Would have been a disaster:rolleyes:

And to think someone sent me a private message some time back (which I didn't see until months later) asking why I had suggested that she and one other exec were lightweights compared to one they got rid of... well, I guess the proof is in the pudding. The problem at Virgin is that it's an echo chamber... before it was only what the then CEO wanted to hear that got to the top... the echo chamber appears to have resulted in the departure of those that refused to repeat the echo and might have had a semblance of ability or knowledge in the industry... it's like the insular little group that meet regularly to pat themselves on the back and tell stories of how they think the world is... and deny reality. It's the corporate equivalent of Monty Python "No... it's just a flesh wound"...

[wheels_down]

Here we go...

What happens to all the excess pilots and I assume that means goodnight Irene to the BNE base.

[Goat Whisperer]

Highly unlikely that there will be redundancies from the pilot ranks. Part of the benefit of the GDOJ list is redeployment across the group. Could let some of us VA types catch up on leave!

VARA is the closest to being overcrewed, losing 3 F100s, but the company has a few tools at its disposal, 737 jobs, leave without pay (pick me!!!) etc.

[pinkpanther1]

Is there the possibility of the 2 TT 320s replacing the 3 F100s?

[Colonel_Klink]

Is there the possibility of the 2 TT 320s replacing the 3 F100s?

I think that’s a very reasonable assumption to make.

Allegedly those F100s are coming off the VARA RPT side of things (think BME, KTA, etc). Apparently that flying to be picked up by PER 737 (maybe A320 too?). Although what that does to costs when you have a 100 seat jet replaced by a 170 seat jet - who knows? But I suppose that’s similar to some of the routes that were purely ejet back in the days.

[wheels_down]

The remaining Tiger Airbus fleet is relatively young and would probably command too high of a price premium to go to VARA, who essentially get the high cycle low lease cost frames. The aircraft already gone to VARA cost a third to lease compared to the rest of the Tiger fleet. There was a Tiger batch delivered until 04/05 ex Singapore then the next lot is 08 onwards build with new upgrades. These are highly sought after frames globally, especially the last couple delivered.

Think back to the start. They started leisure routes then went after the triangle. On time performance went out the door with that also. ASP/MCY/MKY/ROK/LST.

[industry insider]

Allegedly those F100s are coming off the VARA RPT side of things (think BME, KTA, etc). Apparently that flying to be picked up by PER 737 (maybe A320 too?). Although what that does to costs when you have a 100 seat jet replaced by a 170 seat jet - who knows? But I suppose that’s similar to some of the routes that were purely ejet back in the days.

Its a necessary move, F100s close to 30 years old will no longer be acceptable to VARA's resource clients travelling to BME/KTA etc.

[burned_out]

Its a necessary move, F100s close to 30 years old will no longer be acceptable to VARA's resource clients travelling to BME/KTA etc.

VARA selling / parting out the 2 F100's. That will cover them to operate the others without cost for a little while.
The illustrious management has stated that there is demand for the A320. So on top of the 5 A320's VARA has, more A320's will be going VARA's way. Yes prob from TT's A320 fleet..... So the Question is, why would they have smaller A320 numbers in VARA and call that efficient yet Tigers fleet somehow is inefficient? Smells like B.S CEO bonus chasing to me

[davidclarke]

Interesting article in the AFR.

https://www.afr.com/companies/transport/l1-capital-says-virgin-could-be-forced-to-shut-tiger-20191129-p53fhc?&utm_source=facebook&utm_medium=social&utm_campaign=nc&eid=socialn:fac-14omn0053-optim-nnn:nonpaid-25/06/2014-social_traffic-all-organicpost-nnn-afr-o&campaign_code=nocode&promote_channel=social_facebook

[Climb150]

Why do people post links that take you to a paywall?

[davidclarke]

Why do people post links that take you to a paywall?

It didn’t take me to a pay wall.

[morno]

It didn’t take me to a pay wall.

I can assure you, I can’t read the article without paying for it either

[The name is Porter]

No pay wall for me.

Standby.

[The name is Porter]

L1 Capital has predicted the Virgin Australia-owned budget carrier Tiger Airways will continue to cut capacity and could eventually be forced to shut the airline completely, as Virgin's new chief Paul Scurrah hunts for ways to lift profits (https://www.afr.com/link/follow-20180101-p537tl).

But Virgin says it has no plans to shut the airline, and says capacity reductions announced across the group last month (https://www.afr.com/link/follow-20180101-p5377y), which included cuts at Tiger large enough to have two planes taken out of its fleet, will strengthen Virgin's financial position.

Mark Landau, managing director of L1 Capital, which is an investor in Virgin's rival Qantas, made the bold prediction on the future of Tiger at the Future Generation investor forum in Melbourne last week.
Capacity cuts are already under way at Tiger under Paul Scurrah.
He argued a restructuring at Tiger would be the catalyst for a surge in profitability at both Qantas and Virgin Australia, which acquired the 40 per cent of Tiger it didn’t already own in 2015.

“Tiger is losing money on many routes and it will be forced to significantly cut capacity or shut down altogether," Mr Landau told the forum. "That will be the step change that will see both airlines significantly increase their profitability.”Mr Scurrah has promised a renewed focus on earnings and cash flow at Virgin, and taken action to cut costs at Tiger in recent months, announcing a series of structural changes and pushing ahead with a plan to use only Boeing 737s in its fleet to manage costs.

On November 6, Virgin announced a plan to slash capacity across the group by 2 per cent by the end of the 2020 financial year.

As part of these cuts, Tiger will no longer fly the Brisbane-Darwin route or Proserpine-Sydney from February next year. Flights from Adelaide to Brisbane will cease at the end of March next year.

Virgin’s balance sheet has now become very highly geared, which will force them to be far more focused on route profitability.

— Mark Landau, managing director, L1 Capital

But Virgin says the subsidiary remains an important part of its future.

"Operating our low-cost carrier strengthens our offering and enables us to cater to a growing low-cost market segment in Australia," a spokesman said.

"A number of changes are under way to improve Tigerair's financial performance. In November, we announced network changes to reduce capacity, fleet and ensure Tigerair is flying on the routes it is best suited."

But Mr Landau says the announced cuts will not go far enough and Mr Scurrah will need to take more drastic action.

He said on Sunday that Tiger generated a negative 8 per cent margin on earnings before interest and tax in the 2019 financial year and "we believe that would only have deteriorated this year given the weakening domestic leisure market".

Mr Landau said L1's analysis suggested Tiger is "currently operating numerous routes at negative 15 per cent margins or worse, which is simply unsustainable".Virgin's Scurrah brings urgency to turnaround (https://www.afr.com/chanticleer/virgin-s-scurrah-brings-urgency-to-turnaround-20191106-p537tl)"Virgin’s balance sheet has now become very highly geared, which will force them to be far more focused on route profitability and cash-flow generation, which we would expect will see both Qantas’ and Virgin’s earnings recover from this cyclical low point," he said.

Capacity cuts at Virgin would be a big win for Qantas. Despite L1 enjoying about a 150 per cent gain on Qantas over the past few years - and the stock soaring seven-fold in the past six years - Mr Landau said L1 was not ready to take profits just yet.

He said it was remarkable that Qantas still traded at an 11 times price-to-earnings multiple despite the significant reduction in volatility chief executive Alan Joyce had engineered. This is around half the average multiple of industrial companies on the ASX.Qantas targets growth in domestic operating margins (https://www.afr.com/companies/transport/qantas-targets-growth-in-domestic-operating-margins-20191118-p53bna)He said the multiple suggested earnings would stagnate or go backwards, with the end of irrational competition boosting profitability.

"Put simply, we think this is ridiculous," Mr Landau said.

"Qantas has dramatically improved the efficiency of its business over the past six years, which has made it a far more formidable competitor than ever before."

Virgin shares have fallen 19 per cent year to date, while Qantas shares are up 26 per cent.

[Buster Hyman]

Should've sold it to Fox when the offer came in.

[wheels_down]

It just rehashes the same old same old. Tiger loses money. Certainly no trade secret.

The larger issue is the slowdown in the leisure end as quoted by Jetstar on the last half. Qantas is also feeling this. Virgin domestic is not seeing this trend. Tiger whilst it’s numbers are terrible so hard to judge, would only indicate it would just make it harder to get back to the green.

The Virgin 737 operation has a much larger leisure network compared to the QF 737 operation. What’s interesting is these passengers are not dropping off. Essentially it’s the bottom of the barrel market that is going backwards. The premium leisure market (ie non bogan) is growing, PS has acknowledged this countless times and is a large focus going forward.

A lot of upside for Virgin to can the Tiger.

[Oriana]

The premium leisure market (ie non bogan) is growing

Don't kid yourself - it's a bogan country.

[wheels_down]

News Corp has picked up the story now. ‘Monumentally Stupid decisions’ made at this mob.

https://cimg4.ibsrv.net/gimg/pprune.org-vbulletin/1125x1445/f18d030e_b29d_4576_9a2c_ed8b86aa3efa_579e8ca27ab2ac14b0ebe05 8dacd5b23a259599b.jpeg

[Superman1]

And Virgin has done some monumentally stupid things with Tiger like investing in changing the fleet to try and make it the same as Virgin when even Virgin doesn’t have a common fleet.”


Yep pretty much.....they spent millions removing them from Tiger to simplify the fleet....but then moved them back into the Group to VARA?

Genius! :ugh:

VA was never going to be able to save TT considering they couldn’t even run their own airline. It’s possibly the most incompetent airline group to have ever formed.....fingers crossed PS takes a broom to the place and gets some people with some actual experience and intelligence who have previously worked at a real airline to turn it around.

[Asturias56]

"On November 6, Virgin announced a plan to slash capacity across the group by 2 per cent by the end of the 2020 financial year."

a 2% cut over 12 months is not what I'd call a SLASH - more a slight trim of the toe nails..................

[thefeatheredone]

I think you will find virgin never announced they where “slashing” routes, simply they where putting it all under the microscope and making changes where needed.
The qantas fed bloggers (sorry can’t bring myself to call them journo’s) did with that info what they can always be relied upon to do.

[John Citizen]

What's going on at Tiger

Apparently Tiger are going to smash Jetstar the same way Virgin will smash Qantas, is what I heard.

[porch monkey]

John, you probly shouldn't take everything your guide dog says as gospel.

[John Citizen]

John, you probly shouldn't take everything your guide dog says as gospel

Do you actually believe dogs can talk ? https://www.pprune.org/images/smilies2/eusa_clap.gif

A Virgin pilot told me this actually. https://www.pprune.org/images/smilies/eek.gif

[Ragnor]

Apparently Tiger are going to smash Jetstar the same way Virgin will smash Qantas, is what I heard.

Yes Tiger will smash JQ with with their mixed bag of 10 aircraft and VA will smash QF by starting a price war.

[Berealgetreal]

Most know the score, the only smashing is done by the QF group. It’s kind of like game set match every year.

The price war was the worst thing that happened to Virgin and it’s employees, they’ll pay for it for decades. Unbelievable and sad.