Crawford Rix

Crawford Rix

Tiger Airways. What can you say? Cheap. And some would say a little nasty.

Unlike other new Low Cost entrants such as AirAsia, Tiger has adopted an abrasive public persona since arriving in Australia, best seen in the public comments of founder Tony Davis and its local leaders, including new boss Crawford Rix, who last week bitched about loyalty schemes. Why? Tiger doesn’t have one.

All it has is price, unlike rivals Jetstar, Qantas and Virgin Blue. “They are like smoking,’ Rix said of frequent flyer schemes. “If they hadn’t come from a bygone age they wouldn’t be allowed today. How can it be in any corporation’s interest to have its travelling workforce increase its travel overheads for an untaxed personal benefit?” Answer: many companies believe their employees deserve some kind of reward for time spent away from family and friends. 

Inadvertently, Rix exposed a key the key weakness of the Low Cost Carrier model as adopted by Tiger Airways. It’s only about price. 

If you don’t have the lowest fares people will look elsewhere because they won’t pay a premium for cheap service. 

His comments about corporates also show basic ignorance of modern workplace culture and strike at the difficulties Tiger faces in attracting this market in Australia, absolutely essential to long-term success, as recent poor results of Virgin Blue demonstrate.

In fact Virgin Blue is a good case in point. They started here as a pure LCC but found they couldn’t compete with Qantas and later Jetstar on the key business city pairs like Sydney-Brisbane and Sydney-Melbourne without a frequent flyer scheme and lounges, so they built them and in doing so took their business model upmarket.

Recent statements from new boss John Borghetti shows they will be getting even more serious about this sector. They have no choice. 

But Rix didn’t like that approach either. “Hybrid low cost carriers … are trying to rebendle what was unbundled previously… Hybrid won’t be a destination Tiger Airways will be taking you.”

There has to be some kind of strategy behind these comments at an industry forum but it’s hard to determine what they are. Cheap shots don’t get you far in life – or business. Friends and loyalty are much more important, they make the difference.

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