Cheap As Chips – And Loving It!

 
 
 
  
 
 
 
 
 
 
 
By Martin Kelly
 
BEING known as cheap doesn’t scare Tiger Airways CEO Tony Davis. In fact, he reckons it is great branding.
 
“We definitely want to have the lowest price – Tiger Airways is the home of S$1 airfare,” he says.
 
Plus fees and charges, of course, although advertising laws in its home base of Singapore mean these don’t have to be included in the advertised price.
 
Davis, a speaker at the Wired 2005 conference, sees no issue with this and doesn’t believe he is tarnishing the brand through what some may see as concealing hidden costs.
 
The only thing he cares about is selling airfares and working his aircraft hard.
 
In fact, you get the feeling he lie awake at night fretting Tiger’s four Airbus A320 aircraft aren’t flying enough between midnight and dawn.
 
Part of this issue has been resolved with Tiger scheduled to fly overnight between Singapore and Darwin four times a week from December 19.
 
Tickets started selling last Friday and cost from S$49.98 or A$39.98.
 
Tiger also recently started flying between Macau-Manila-Singapore and now flies to 11 cities in six countries.
 
“We had just three routes at the start of this year,” says Davis, who has a huge motivation to make Tiger Airways the ‘Ryanair of Asia’ (as he puts it).
 
After all, it’s his money at stake. Davis owns 16 per cent of Tiger through family company Irelandia.
 
The balance is held by Singapore Airlines (49 per cent), Temasek (11 per cent) and Indigo (24 per cent).
 
And he is clearly driven to achieve growth with a philosophy of: “Stack it high, sell it cheap – think retail.”
 
This has led to the rapid expansion, with a 60 per cent increase in revenue and website visits since July.
 
“We had 60,000 visitors a week to our website earlier this year – now it’s around 120,000 a week as people get back online to check what we are doing.
 
“Around 75 per cent of our seat sales currently come from the internet, both from the public and agents, while the balance comes from call centres and airport outlets.
 
“This shows that the Low Cost Carrier model of using online marketing and technology to reduce operating costs is working in Asia as well.”
 
According to Hitwise statistics quoted by Davis, Tiger (at 14.86 per cent) has the highest online market share of Low Cost Carriers in Singapore, although Singapore Airlines (25.63 per cent) still dominates the airline sector.
 
 
BACKGROUND
 
The following background comes from www.tigerairways.com
 
CORE BUSINESS STRATEGY

The Tiger Airways Low-cost carrier model is based on three customer-focused core strategies:
 
1)  Market stimulation – creating opportunities for new travelers and empowering budget-conscious people to fly more often;
 
2) Stringent cost controls throughout our operations so that we can keep our fares low for travellers;
 
3) Capacity utilisation – maximising the number of sectors served per plane in a day with efficient air traffic planning
 
DESTINATIONS
 
Tiger Airways flies to 11 cities in six countries from Singapore Changi Airport:
 
Country
City
Airport
Australia
Darwin
Darwin InternationalAirport. NEW! Flights to commence 19th Dec 2005
Macau
Macau
Macau InternationalAirport
Thailand
Bangkok
Bangkok InternationalAirport
Chiang Mai
Chiang Mai International Airport
Hat Yai
Hat Yai International Airport
Krabi
Krabi Airport
Phuket
Phuket International Airport
Vietnam
Hanoi
Noi Bai InternationalAirport
Ho Chi Minh City
Tan Son Nhat International Airport
Indonesia
Padang
Mingangkabau International Airport
Philippines
Manila (Clark)
Diosdado Macapagal InternationalAirport
Two-Letter Code: TR
Three-Letter Code: TGW
FLEET SPECIFICATIONS:
  • Four Airbus A320 aircraft, all powered by International Aero Engines (IAE) V2500 engines, a modern jet engine with proven track record of reliability and efficiency
  • Tiger Airways uses a single aircraft type for operational efficiencies which lowers cost
  • Tiger Airways A320 aircraft have a single-class configuration of 180 seats
  • Tiger Airways aims to have one of the newest fleets among the low cost carriers
  • Tiger Airways purchased 8 new A320 aircraft from Airbus and will take delivery of 2 aircraft in March 2006, 3 more aircraft in Winter 06 and 3 more aircraft in Summer 07. 
SAFETY:
  • Tiger Airways has committed S$110 million for a 5-year maintenance contract with SIA Engineering
  • 24 hour Fleet Technical Management and provision of maintenance, repair and overhaul (MRO) services by SIA Engineering
  • Our aircraft maintenance program satisfies the safety standards required by Civil Aviation Authority of Singapore (CAAS)
  • Our pilots are trained inline with industry standards and aviation regulations to ensure the highest safety standards are met
  • Our cabin crew are all trained and qualified on evacuation procedures and drills, fire fighting, security, survival training, first aid, use of emergency equipment in preparation to handle any situation
SECURITY:
  • Bullet-proof cockpit doors installed across its fleet
  • Security cameras installed in passenger cabin for customer and crew safety
ends
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