Geoff Easdown
July 07, 2007 12:00am
TIGER Airways chief Tony Davis is confident he can keep his low-cost operation aloft in the coming dogfight with Jetstar.
"We will be here to compete and we understand that Australia is a tough market and we don't underestimate our competitors," Mr Davis told BusinessDaily.
Mr Davis, like Alan Joyce, his opposite number at Jetstar, is marshalling his forces for a much awaited tickets shootout, due to begin when Tiger launches its first domestic flights from Melbourne to Darwin on December 1.
Also like Mr Joyce, Mr Davis is in his early 40s and has a 20-year background in the international aviation industry.
Mr Davis began his career with British Airways, shifting to a Middle East carrier before returning to Britain to work for British Midland.
Subsequently he worked at its low-cost offshoot, BMI Baby, launching its operations in Europe.
Three years ago he was appointed to his present post as group chief executive of Tiger Airways.
While he will not move to Melbourne, he will appoint someone to run the Australian arm of the business.
Mr Davis says that operating a low-cost airline is more like being in retail than running a transport business.
"It is very different to a normal airline operation, an entirely separate culture," he says.
His Singapore-based operation, which plans to bring five 180-seat Airbus A320s to Australia, will be outgunned by Qantas's low-cost operation Jetstar in available seat numbers.
The Qantas offshoot operates a 23-strong A320 fleet and makes no secret of its intention to swamp the high capacity Melbourne, Sydney and Gold Coast routes with extra seats.
As Mr Davis noted: "Just a few months ago our competitors were telling anyone who would listen that there was not a lot of growth left in the domestic market.
"Since then, and knowing we were coming, they have gone out and secured nine additional aircraft."
Mr Davis placed a firm order at the recent Paris Air Show for a 50-plane squadron of A320 jets. Three of those will operate in Australia.
He says Tiger will have a 70-strong fleet when the 50 new jets are delivered. He remains non-committal on how many aircraft Tiger will ultimately be bringing to Australian routes.
"We will bring as many as we need," he says, offering similar responses to questions of how many people will be employed in Melbourne and what routes Tiger will operate.
Asked why he believes Tiger will succeed when other start-ups -- such as Compass I, Compass II, Impulse and Paul Stoddart's Ozjet -- had failed, he replies: "Any company will survive and prosper if it offers the right product at the right price at the right time.
"We are in a different position to the other start-ups. We are an existing company, we fly internationally and carry people for low fares.
"We have the infrastructure to support our engineering needs, sales distribution and a website which operates today and sells tickets."
Mr Davis says the decision to operate within the Australian domestic market was sparked by the successful service Tiger operates between Darwin and Singapore.
"People were coming up to Singapore and flying on to Bangkok for just a few dollars whereas they complained that it cost them an arm and leg to fly from Melbourne to Sydney."
Mr Davis will not say if he has flown with Jetstar. But his response to the next question that "we'll be a bit more friendly and we'll have a bit more punctual product" seems to provide the answer.
Mr Davis acknowledges that Tiger has incurred losses since launching in Asia three years ago.
"Anyone with knowledge of the airline industry knows that you don't acquire brand new aircraft and establish a route network without losing money from the start," he says.
How much money has the Singapore Government invested in Tiger?
"Less than in some of our competitors," Mr Davis says. "Jetstar Asia only operates in Singapore because it is majority Singapore-owned through Temasek Holdings.
"Temasek owns a larger share of Jetstar Asia than it does of Tiger."