Tiger starts domestic fare war

The Australian

New domestic entrant Tiger Airways yesterday fired its first shot in the fare wars, announcing an all-inclusive one-way fare between Melbourne and Darwin of $79.99 and Melbourne-Singapore return from just $499.
Rival low-cost carrier Jetstar dismissed Tiger’s first effort as unimpressive and immediately moved to undercut its domestic fare by 99 cents. “Where are the single-digit fares,” said Jetstar spokesman Simon Westaway, who noted his airline launched in 2004 with $29 fares.

“We’re not too sure if we’re playing with a Tiger or a cub.”

Tiger’s fare applies to daily flights between Melbourne and Darwin from December 1 and links its home base with one of Australia’s two international gateways.

Tiger chief executive Tony Davis said the one-way ticket was was less than half the advertised fares of competitors.

“Darwin has long suffered from a lack of affordable domestic air fares and this new service by Tiger Airways, with our true low, low fares, will be welcomed by both travellers and the tourism industry alike,” he said.

Tiger will complement its first domestic service by boosting its Darwin-Singapore service to daily from December 1.

The $499 return fare between Melbourne and Singapore included taxes and offered the best value international travel, Mr Davis said.

Tiger, which intends to announce further routes in coming weeks, also is allowing people to change bookings online up to four hours before a flight for $10 plus any difference in fares.

Jetstar’s Mr Westaway cautioned passengers to read the fine print at the airline’s website.

Tiger offered passengers a free luggage allowance of just 15kg compared with 20kg on Jetstar, he said. Jetstar, which has about 14 per cent of the domestic market, has vowed not to be undercut by Tiger. This month it launched a voucher-based promotion offering double the difference if its fares were undercut on a similar flight.

“We are going to continue to respond very competitively and in a rational way, based on our cost base, to any competitor in any market,” Mr Westaway said.