May 19, 2007

Tiger talks $19 Melbourne fare

Plane tickets to Melbourne will cost as little as $19 each way if Canberra Airport is successful in its bid to host the Singapore-based Tiger Airways.

The low-cost airline is planning an aggressive pricing strategy to lure passengers away from Virgin Blue and Qantas if it comes to Canberra.

Managing director of Canberra Airport Stephen Byron met with Tiger executives a fortnight ago to make a final pitch for the company's business.

Tiger announced yesterday it would base its operations at Melbourne Airport but is not expected to decide on flight routes for a few months.

Mr Byron said the airline was considering one flight each way per day, six days a week, from Canberra to Melbourne.

"It's very much a commercially attractive proposition for them because the leisure market around Canberra is under served and there is certainly a shortage of seats for $19," he said.

"They are talking about very low prices because they're very committed to making it work."

Tiger expects to have its air operators certificate by the end of the year, with flights to start soon afterwards.

Virgin Blue is also set to announce additional flights within Australia in anticipation of the delivery in September of the first its fleet of 20 new and smaller aircraft.

Virgin will decide on the locations of its extra flight routes within months but announced yesterday a new VIP lounge to be built at Canberra Airport.

Mr Byron was hopeful Virgin would add to its 58 flights per week in and out of Canberra.

He said airport operations would continue to grow, with plans for a new $100 million terminal in the final stages of negotiations with the airlines.

The airport, Qantas and Virgin have been going through a lengthy process of sorting out lease agreements and legal contracts for the new terminal.

The next step is to design the terminal, which should take about six months.

Mr Byron said the potential takeover of Qantas would not effect plans for the new terminal, but there was still no guarantee the project would go ahead.

"Barring a catastrophe which is not unknown in aviation in relation to surging oil prices, SARS, terrorism and security we are committed to building a new terminal at some point but we can't do that without the agreement of our airline partners."

The airport will start work next month on 330 short and long-stay car-parking spaces to meet current and future demand.

Tiger Airways president and chief executive Tony Davis said yesterday the airline expected to operate at a loss for the first years of operation. "There is no airline that I'm aware of that starts from scratch as a greenfields operation that makes money in its first year.

"What we've managed to do is invest very heavily in new equipment, we're flying brand new aircraft that are very expensive. That's a lot of investment up front for a long-term return.

"We are certainly not in the not-for-profit business, we are in the profit-making business and we believe we can do that by offering really good low fares on a sustained basis."

Marika Dobbin and Micjael Ruffles
Source: The Canberra Times, ACT


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