Are Tiger Customers Too Cheap For Other Airlines To Grab?

Tiger Airways is out of action in Australia until at least the end of the month, and concerns continue that its possible disappearance from the market could result in fares going up. But if the apparent behaviour of some of its stranded passengers are anything to go by, other airlines may not be that keen to add them to their books anyway.

In an interview with the ABC's Inside Business Program, CEO Alan Joyce notes that around 10,000 of the estimated 35,000 Tiger passengers who couldn't fly last week took up Qantas and Jetstar's offer of reduced fares to replace their journey. Market rumblings suggest that Virgin, which made a similar offer, might have acquired 6,000. Even if you assume some people simply rebooked without taking advantage of the specials, that leaves a lot of people who simply give up on the idea of flying if they couldn't do so at their original bargain-basement rates.

As Joyce put it:

We're seeing a lot of the traffic actually not travelling, which I suppose shows how price-sensitive this end of the market is.

It's understandable that neither Qantas or Virgin don't want to acquire a large pool of customers who would rather not fly if it means spending any extra money. It's also worth remembering that Tiger runs just 10 jets and accounts for only 5% of the local market. No matter how cheap its fares, it would be in no position to replace all the flights offered by its larger rivals — something that's also evident in its pricing policy, which varies more than some people realise. Also remember you can score cheaper tickets from almost any airline with the right tactics.

Qantas benefits from Tiger woes [ABC Inside Business]


Comments

    I'm one of those that wont be flying..
    I was scheduled to fly to Melbourne to watch a footy match next week for $80 return, booked back in February.
    The Jetstar offer of $120 tickets each way triples the price of the airfares and significantly eats into the spending money I had budgeted.
    Instead I've decided not to go at all, writing off the sunken cost of accommodation ~$120 and I'll spend the weekend painting walls!
    I guess I'm lucky that the trip is pure luxury and I don't have to make a difficult financial decision to fly to a more significant event.

    Assuming that punters are too cheap to bother with is a bit of a slight..! Those people no doubt wouldn't have bothered, if the cheap prices weren't there in the first place! It's putting the cart before the horse to think of it that way. Had the prices not dropped so low, people would have simply saved up as they did before!

    Also worth remembering that the disgruntled travellers arent likely to see a refund for a few weeks. It might be that many of them couldn't afford to pay an inflated fare in addition to the fare they'd already paid.

    Hmmm......i really dont care......used to travel until last week from Melbourne to Rockhamton for just $60 and around..... to meet my girlfriend....now i brokeup....no more travelling :)

      That's a bit cheap, breaking up with your girlfriend becuase tiger stopped flying.

    I won't ever fly tiger again either. I had booked a $70 flight, one way, from Melbourne to Brisbane with them, then the day before I flew out, Tiger was grounded. A frantic search online to get cheap tickets was in vein and I ended up forking out $400 to fly Qantas, Melbourne to Sydney to Brisbane, the cheapest option left (and twice as long).

    To rub salt in my wounds, I got an email from Tiger 3 days after the cancelled flight was scheduled, notifying me of its cancellation and that they hope I wasn't inconvenienced...

    I think I'll stick with a more reliable airline next time around.

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