Tiger Airways’ launch in Australia means brand war, CAPA says

By eTurboNews Staff writer

Tiger Airways' Australian launch is not about low fares, but more on brand war, Centre for Asia Pacific Aviation says.

Sydney-based specialist aviation consultancy Centre for Asia Pacific Aviation has said Tiger Airways’ Australian launch today is not so much about low fares, but the beginning of a brand war that will envelop Asia Pacific aviation in the next few years.

"In Australia, where domestic access is liberally offered, the days of the age-old Australian airline duopoly structure are probably gone forever,” CAPA executive chairman Peter Harbison said. “Tiger is a sustainable and well funded, well managed model.”

According to CAPA, neutral brands, that can penetrate cross-borders, are at the cutting edge of aviation development in the region, and will steadily diminish the presence of the national identity brands, or “flag carriers” and that both will continue to have a future role to play, and profitably. But the high growth rates of the next decade will come from the new entrants and several strong brands.

“Jetstar, for example, has leapt into the Top 5 international outbound carriers from Australia, leapfrogging Thai Airways and Malaysia Airlines. It is aiming to have a similar impact at other Asian bases in the not-too-distant future, as is Tiger Airways, following in the footsteps of AirAsia’s trailblazing, brand building cross-border JVs.

“What we are seeing is nothing short of a revolution in the airline business in this region. The Asian travel market, while growing in size, is much the same as it ever was in essentials – but airline business models have changed, as airlines, led by the likes of the Qantas Group, have become more sophisticated in serving that market with separate flying brands.”

CAPA said this will ensure the survival of more airlines in the market, as carriers compete for more clearly defined segments side-by-side, with much more appropriate and sustainable cost bases - even with oil at US$100 per barrel.

Printable Version | published Nov 28, 2007

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