VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

[Noob]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Was thinking about this lastnight, and how VA could turn around Tiger’s poor reputation.

Rename to….. Virgin Blue, and instantly capitalise on existing brand recognition and LCC travel base.

Virgin Australia - Full Service
Virgin Blue - LCC

Either way, interesting times ahead.

That would probably be one of the most confusing dual brand strategies in history. People usually refer to Virgin Australia and Virgin Blue as simply "Virgin", hence having two players in the market with Virgin in their name would be not unlike Qantas having "Qantas" and "Qantas Star". Not to mention the impact on the premium brands.

It's best to keep the brands as far apart as possible so no cues link them in any way to one another.

The Tiger brand is incredibly distinctive on the other hand.

 

[smit0847]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

That would probably be one of the most confusing dual brand strategies in history. People usually refer to Virgin Australia and Virgin Blue as simply "Virgin", hence having two players in the market with Virgin in their name would be not unlike Qantas having "Qantas" and "Qantas Star". Not to mention the impact on the premium brands.

It's best to keep the brands as far apart as possible so no cues link them in any way to one another.

The Tiger brand is incredibly distinctive on the other hand.

What about Tiger Blue? Reminds you thats its the cheap fares of Tiger with the management of Virgin Blue.

I also think they should have changed their name to Scoot during their grounding. When I think Tiger the first thing I think of is 'unreliable'. It's going to take a very long time to change that.

 

[DJ332]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Interesting times ahead indeed.

I think the best thing the Tiger brand has going for it now is a reputation for offering the lowest fares in the market. They have the low headline fare and are generally recognised by the public as offering the cheapest option on any given route. The TT acquisition is clever because Virgin now have access to a fully-developed LCC brand, a lower cost base than JQ and no real structural problems to fix - the grounding last year allowed (or forced, depending on how you look at it) TT to rationalise its routes. While Tiger might not be everyone's first choice, they have certainly made enormous improvements since last year and with a tripling of their fleet should be able to compete much more effectively with JQ. JB also has the benefit of hindsight and has clearly stated there won't be any codesharing on each others' services - a very smart move indeed.

 

[Simo]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

The next few years will very interesting with to see how VA and tiger go.

Let's make a prediction that VA will become a full service airline and Tiger will stay the same but will be rebranded but with some relevance to Virgin and maybe called Budget Virgin or something like that.

VA will get off the low yield routes and they will become Tiger routes and then increase capacity on high value routes such as golden triangle and I think VA will ditch MCY but will probably add more flights to places like EMD to capture more of the mining $$$$$$$

 

[oz_mark]

The next few years will very interesting with to see how VA and tiger go.

Let's make a prediction that VA will become a full service airline and Tiger will stay the same but will be rebranded but with some relevance to Virgin and maybe called Budget Virgin or something like that.

VA will get off the low yield routes and they will become Tiger routes

At which point, velocity members will start complaining about lack of lounge access, lack of point accrual, lack of status recognition etc, when flying tiger....


Sent from my GT-I9300T using AustFreqFly

 

[Simo]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

At which point, velocity members will start complaining about lack of lounge access, lack of point accrual, lack of status recognition etc, when flying tiger....


Sent from my GT-I9300T using AustFreqFly

I hope VA see's the error in the QF had done Jetstar.

 

[Fruitcake]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

At which point, velocity members will start complaining about lack of lounge access, lack of point accrual, lack of status recognition etc, when flying tiger....

Exactly. Which is why the brands shouldn't come within a mile of each other. TT should keep operating out of tin sheds if their customers are happy with that (given the cost of their fares). Virgin no doubt knows how much business they pick up due to previously loyal mainline QF pax coming to DJ rather than flying JQ and hopefully won't be silly enough to do the same thing.

Note that the only mention Scoot gets on the SQ website (outside of PDFs of the annual reports) is in a list of subsidiaries - where it is listed dead last after SIA Cargo, SIA Engineering, Silkair, and even their package holiday arm. And you certainly won't find SQ trying to sell you a LHR-OOL ticket where SIN-OOL-SIN is on Scoot whereas Qantas is quite happy to sell you a MEL-LHR ticket with MEL-SIN or vice versa on JQ.

 

[ajw373]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Let's make a prediction that VA will become a full service airline and Tiger will stay the same but will be rebranded but with some relevance to Virgin and maybe called Budget Virgin or something like that.

Here is a quote from the The Age in relation to the buyout.

"Tiger will continue to use the Tiger brand for at least another 20 years"

Read more: Virgin does deals with Singapore, Tiger, Skywest

Of course bearing in mind Virgin Aus have only purchased 60% of the business. Skywest on the other hand is a name that I think will dissapear from scheduled passenger service, though may well remain a seperate brand in the FIFO market.

 

[Bundy Bear]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Interesting times ahead indeed.

I think the best thing the Tiger brand has going for it now is a reputation for offering the lowest fares in the market. They have the low headline fare and are generally recognised by the public as offering the cheapest option on any given route. The TT acquisition is clever because Virgin now have access to a fully-developed LCC brand, a lower cost base than JQ and no real structural problems to fix - the grounding last year allowed (or forced, depending on how you look at it) TT to rationalise its routes. While Tiger might not be everyone's first choice, they have certainly made enormous improvements since last year and with a tripling of their fleet should be able to compete much more effectively with JQ. JB also has the benefit of hindsight and has clearly stated there won't be any codesharing on each others' services - a very smart move indeed.

Virgin have an interesting problem to solve.

Tiger will continue to be the low fare airline and compete against Jetstar, but the question will be on routes and frequencies.

Places like Ballina and Prosperpine currently only have Jetstar will Tiger take over this markets when Virgin exits the market or does Virgin keep these markets and Tiger competes against Virgin on multiple markets, like Cairns, Maroochydoore and Gold Coast.

Markis10 brings up an interesting question.

LCCs like A320s because you can turn them around much quicker, however they do require more sophisticated machinery to do this, making high frequency city pairings economical while one flight a day ports tend to be the realm of the 737 NG, and non LCC carriers.

So does Tiger take over these LCC routes like Ballina which then Virgin would lose of their network or will Virgin continue to fly to these destinations offering some business type service to these markets.

Tiger is expected to have 35 aircraft in the years to come and I am sure there is enough market for multiple daily round trips to Gold Coast, Cairns from a whole bunch of cities to get the frequency up to get a decent schedule in place.

A place like Bali might be transferred to Tiger Australia but then I would expect Fiji to stick with Virgin Australia for the time being, what this new arrangement would allow is for Virgin to control the ebb and flow of the different markets.

But isn't the 737 used by the most successful LCC's?

Probably the most successful LCC is Southwest Airlines in the US and it was more of timing and the right aircraft 737-200 were available. They had 3 aircraft then purchased a 4th aircraft which they could not afford so instead of cutting the schedule they just turned the planes around quicker.

Qantas needed to have different aircraft to Jetstar that way a whole bunch of new union rules didn't have to be the same on Qantas as on Jetsar as the plane types would be different.

 

[Dee Thom]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Qantas needed to have different aircraft to Jetstar that way a whole bunch of new union rules didn't have to be the same on Qantas as on Jetsar as the plane types would be different.

And there lies the reason why the Tiger brand will not change, "Union rules".

Cheers,
Dee.

 

[eastwest101]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Places like Ballina and Prosperpine currently only have Jetstar will Tiger take over this markets when Virgin exits the market or does Virgin keep these markets and Tiger competes against Virgin on multiple markets, like Cairns, Maroochydoore and Gold Coast.

I would expect VA to drop Ballina, Proserpine, Launceston and maybe some of the WA regional centres - because they don't offer Biz on these routes its a waste of resources flying empty J cabins around the countryside so would be inclined to put Tiger on them, or downguage from B737/E190 to ATR's. Anywhere where QF or QFlink is making a killing without any competition is a target for either TT A320's or VA mainline, Mt Isa is a good example of this. This would free up some of the VA fleet to increase frequency and capacity in its own domestic route network.

Qantas needed to have different aircraft to Jetstar that way a whole bunch of new union rules didn't have to be the same on Qantas as on Jetsar as the plane types would be different.

That is exactly the reasoning that I had heard from others in the industry as well.

 

[pauly7]

It's best to keep the brands as far apart as possible so no cues link them in any way to one another.

Completely agree. The Tiger brand is a mess in Australia and has many brand attributes that Virgin will want to keep as far away from the virgin mainline brand as possible.

I suspect we will see virtually nil consumer facing integration at least on the short to medium turn, at least until DJ sort Tiger out.

I'm sure they will cop some people blaming Virgin if Tiger continues to cancel and operate unreliably by pax pointing out the ownership structure and demand mainline assistance (a la JQ early days with QF).

Interesting to watch and see!

 

[markis10]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

I'm sure they will cop some people blaming Virgin if Tiger continues to cancel and operate unreliably by pax pointing out the ownership structure and demand mainline assistance (a la JQ early days with QF).

Interesting to watch and see!

Those 41 cancellations Tiger did in the last year must really be impacting business, just like their OTP at 89%.

 

[pauly7]

I would expect VA to drop Ballina, Proserpine, Launceston and some of the WA regional centres - because they don't offer Biz on these routes its a waste of resources flying empty J cabins around the countryside so may be inclined to put Tiger on them, or downguage from B737/E190 to ATR's. This would free up some of the VA fleet to increase frequency in its own domestic route network.




That is exactly the reasoning that I had heard from others in the industry as well.

LST? Really?..... QFlink and JQ are making a killing there with the dual brand strategy.... DJ are a bit stuck at the moment I think Tiger could help them here, not replace them....

 

[Bundy Bear]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

I would expect VA to drop Ballina, Proserpine, Launceston and maybe some of the WA regional centres - because they don't offer Biz on these routes its a waste of resources flying empty J cabins around the countryside so would be inclined to put Tiger on them, or downguage from B737/E190 to ATR's. Anywhere where QF or QFlink is making a killing without any competition is a target for either TT A320's or VA mainline, Mt Isa is a good example of this. This would free up some of the VA fleet to increase frequency and capacity in its own domestic route network.

As Virgin Australia have some E190s I think these are perfect for places like Launceston and Ballina, allows Virgin to have have these routes on their network.

Places like Rockhampton Virgin can have the frequency of a Jet E190 but without having to find 168 seats to fill the aircraft.

Launceston is a strange market for Qantas, as you look to the Qantas website you see Qantas and Jetstar flights all mixed in and that is one thing that Virgin were going to keep the brands separate.

I don't expect to see Tiger running WA Intra state routes, you will just see Tiger running overnight flights to Perth from Melbourne and eventually Sydney to keep the usage of the aircraft up.

 

[ajw373]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Qantas needed to have different aircraft to Jetstar that way a whole bunch of new union rules didn't have to be the same on Qantas as on Jetsar as the plane types would be different.

They could have done that with the same a/c too. I've mentioned it before but the rumour mill of the time was Qantas had signed or was about to sign an order, but not made public for Airbus A320's in late 2001. However the two aviation related events that happened in September of that same year meant Qantas needed narrow body a/c very quick so Qantas ended up with the 737-800's it has now and a year or so latter Jetstar emerged from Qantas' earlier purchase of Impulse and ended up with the A320's. And bear that in mind what we know today as Jetstar is the core of the old Impulse airlines.

 

[markis10]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

They could have done that with the same a/c too. I've mentioned it before but the rumour mill of the time was Qantas had signed or was about to sign an order, but not made public for Airbus A320's in late 2001. However the two aviation related events that happened in September of that same year meant Qantas needed narrow body a/c very quick so Qantas ended up with the 737-800's it has now and a year or so latter Jetstar emerged from Qantas' earlier purchase of Impulse and ended up with the A320's. And bear that in mind what we know today as Jetstar is the core of the old Impulse airlines.

And as mentioned before, QF did not sign an order with Airbus until two months after the announcement that JQ was being formed and three months after the slots were reassigned for the AA 737s, there was plenty of speculation at the time as there had been for years that QF was going to cease being a Boeing only customer, but it was pure speculation and not fact.

I certainly would not say what we have in JQ today is the core of the old Impulse operations, given Impulse was mainly BE1900s with the 717s operating the golden triangle, it took JQ a long time to get back to those ops as far as the triangle goes strangely enough (along with HBA and NTL), for some reason QF was dominant .

 

[ajw373]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

And as mentioned before, QF did not sign an order with Airbus until two months after the announcement that JQ was being formed and three months after the slots were reassigned for the AA 737s, there was plenty of speculation at the time as there had been for years that QF was going to cease being a Boeing only customer, but it was pure speculation and not fact.

I certainly would not say what we have in JQ today is the core of the old Impulse operations, given Impulse was mainly BE1900s with the 717s operating the golden triangle, it took JQ a long time to get back to those ops as far as the triangle goes strangely enough (along with HBA and NTL), for some reason QF was dominant .

You really have a bee in your bonnet over this Qantas A320 issue. If you actually took the time to read rather than shoot me down you would see every time I have mention it I use the word RUMOUR. Do you know what RUMOUR means? Really, give it a rest, because as it was a rumour there is no way I can prove it and there is no way you can categorically disprove it, because it was just a rumour. However based on scale of accuracy/probability I would put it at about 99%, if you want to disagree with percentage then fine, would love to hear what number you have in mind?

Also I think your timings are out a bit. Qantas announced their take over of AA 737-800 slots in late 2001, with the first one ready in Feb 2002. Jetstar wasn't announced until October 2003 with first A320 delivery in June 2004. Pretty quick don't you think, unless of course the slots already belong to Qantas. So again refer to above RUMOUR.

However when it comes to Jetstar again I think you have shot your response without reading actually what I was saying. I was not talking about Jetstar being the core from a route perspective, but Jetstar the company being formed from the core of Impulse.

Shall I remind you of the history of Impulse and Jetstar? In early 2001 Qantas brought Impulse and integrated them into the QantasLink brand, but still separate from other QantasLink "operators". Remember their boarding passes where they said operated by Impulse? And the routes that "QantasLink operated by Impulse" were running, yep they were mainly leisure routes like SYD-OOL, sound familiar? Then when they invented Jetstar they did it by re branding Impulse and repainting the 717's. Then came new aircraft, and yes the A320's and where did they get delivered and serviced, umm yep Newcastle which is where Impulse was based and where the main Jetstar base is today.

Then of course once Jetstar was finished with the 717's they then returned to Qantas but this time under the control of NJS/Cobham. So as I said Impulse is 100% the core of Jetstar, it was not a new company, so getting back on topic Virgin's purchase of Tiger is very much like Qantas' purchase of Impulse.

 

[oz_mark]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

And as mentioned before, QF did not sign an order with Airbus until two months after the announcement that JQ was being formed and three months after the slots were reassigned for the AA 737s, there was plenty of speculation at the time as there had been for years that QF was going to cease being a Boeing only customer, but it was pure speculation and not fact.

I thought the order for A380/A330 aircraft had preceded this, so Qantas was already heading down the non Boeing path?

 

[Fruitcake]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

I certainly would not say what we have in JQ today is the core of the old Impulse operations, given Impulse was mainly BE1900s with the 717s operating the golden triangle, it took JQ a long time to get back to those ops as far as the triangle goes strangely enough (along with HBA and NTL), for some reason QF was dominant .

To be fair that's more by design than misfortune - JQ was specifically designed to use secondary ports where possible - a la the European LCC model. Unfortunately Australia only really has two sensible secondary airports for major ports - AVV and OOL, so that was eventually thrown away and they started operating routes alongside QF.