Borghetti: Virgin Australia may 'tweak' routes, boost Tiger flights

Borghetti: Virgin Australia may 'tweak' routes, boost Tiger flights

Virgin Australia CEO John Borghetti has pledged that Virgin won't drop out of routes in favour of new low-cost sibling Tiger Airways Australia.

However, he said that some of the more popular routes shared between both airlines could see fewer daily Virgin services, while flights by Tiger could increase to fill the gap.

Speaking to investors at a Macquarie conference in Sydney yesterday, as reported by The Australian, Borghetti promised "we won't do wholesale substitution" of Virgin for Tiger, hinting at previous instances where rival Qantas had handed over certain domestic routes to Jetstar.

"We won't pull Virgin out of any port and impose a product type on the customer base, irrespective of what they want."

"What you might see is on particular destinations you will tweak it", Borghetti allowed.

"If there are five flights a day to a particular destination on Virgin and Tiger operates one a day, we might drop to four and say, 'you increase yours to two because the market is out of balance now', but you are not going to see wholesale withdrawal."

"We have got a good network coverage as Virgin now, so we don't want to shrink that. We just want to overlay on some routes the requirement for a low-cost carrier."

Borghetti reiterated his previous stance that Tiger would remain a completely separate airline from Virgin when seen from the traveller's perspective, with no codesharing with Virgin or partners such as Air New Zealand, Singapore Airlines and Etihad.

Announcing his plan in October last year to purchase 60 percent of Tiger, in a deal priced at $35 million, Borghetti said that "In effect, Tiger will be run as a separate business with a separate board... it will not be polluted in any form of distraction and will remain true to the from the low-cost carrier concept."

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David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

17 comments

  • Charles

    SteveCF

    2 May, 2013 12:52 pm

    If I was Borghetti I would do the following:

    1/ Re brand Tiger and get rid of the Tiger name.

    2/ Ring up Brett Godfrey and ask him to do what he did over a decade ago, set up a budget airline with a bit of cheek, and edgy. 

    3/ get that set up right then Borghetti can finish Virgins transition to a full premium product, not keeping a toe in holiday and business products.

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  • JamesM

    JamesM

    2 May, 2013 03:49 pm

    SCF, Brett Godfrey and John Borghetti are barely on speaking terms, no way would BG come back to work under Borghetti!

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  • Charles

    SteveCF

    2 May, 2013 03:54 pm

    I didn't know that, wonder what thats all about?  But none the less, the point is get somebody with runs on the scoreboard. 

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  • Longreach

    Longreach

    3 May, 2013 05:18 pm

    Bring back Godfrey, get rid of Borghetti and all will be well, the airline will lose the blatant Sydney-centricity it has acquired, and Borg will never have to fly again. 

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  • TheManInSeat0A

    TheManInSeat0A
    Banned

    2 May, 2013 01:11 pm

    Thats got a highly remote possibility of happening. Borghetti and Godfrey are not the best of mates.... and speaking terms I believe...

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  • Waynec

    Waynec

    2 May, 2013 01:17 pm

    Virigin would probably try to position Tiger to compete with Jetstar. But given its appalling safety record, it remains to be seen if Tiger can really attract passengers to switch over from Jetstar.

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  • Peter Loh

    PeterLoh

    2 May, 2013 01:52 pm

    Given that Jetstar is more often than not more expensive than Qantas mainline, if Tiger were to maintain its current pricing and increase frequencies at the same time then Jetstar could start loosing passenger. Of course, that added competition should bring Jetstar pricing down to a level somewhat based on "low cost" and allow Qantas/Virgin to limit the cannibalisation of fares on their mainlines.

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  • Alan Guignon

    OzTraveller

    2 May, 2013 02:52 pm

    What "appalling safety record" of Tiger ...?       You sound like a Sunday Telegraph front page headline.  

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  • Stewart Smith

    ssmith3104

    5 May, 2013 05:59 pm

    LOL

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  • AusFlyer

    AusFlyer

    2 May, 2013 01:36 pm

    Oh please... he "pledged that Virgin won't drop out of routes in favour of new low-cost sibling Tiger Airways Australia" and in the next sentence "he said that some of the more popular routes shared between both airlines could see fewer daily Virgin services, while flights by Tiger could increase to fill the gap.".

    Give it some time and let's see whether his pledge holds true!

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  • Waynec

    Waynec

    2 May, 2013 02:18 pm

    Although he didn't specifically mention dropping out of certain routes, mainline capacity on lower yielding routes especially at leisure destinations could be reduced signifcantly in favour of Tiger which could operate at a far lower cost.

    He probably wants to mainatin Virgin presence at as many ports as possible while taking a dig at Qantas which dropped out of Gold Coast in favour of Jetstar for a few years.

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  • JamesM

    JamesM

    2 May, 2013 03:48 pm

    AusFlyer, those are two very different things. Borghetti means that Virgin won't pull out of entire routes in favour of Tiger, which is exactly what Qantas did with Jetstar - the Gold Coast being a prime example of this, although QF has recently  come back to OOL, no doubt a lot of that is because Virgin is strong there.

    But what he's saying is that Virgin may reduce its flights on some routes where it's pretty heavy, and increase Tiger flights there. Different than VA pulling out entirely.

    And it makes sense to me. Virgin still carries a lot of lesiure travellers, and Tiger could attract more of them. So maybe on some routes Virgin will keep 'peak hour' flights aimed at business travellers and others, but if there was a flight around noon which they find is typically less patronised for business and also a bit light in economy, why not swap that out for a Tiger flight? 

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  • AusFlyer

    AusFlyer

    3 May, 2013 02:39 pm

    I still believe that it will happen and Borghetti should have been more careful with his phrasing. If there is a destination that doesn't require a Virgin style service with a Virgin style cost base, it will go to Tiger and Virgin wil, pull out. It's basic business sense and like it or not Qantas did the right thing in a lot of the markets that went to Jetstar. I don't agree that they should have done it to all the ones that they did but where a route is costing more to run than is feasible then isn't it better to put on a lower cost base like Jetstar rather than pull out completely? Virgin will have to do the same at some point to some destinations, it's just the way it is.

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  • Liam Rasmussen

    LiamR

    2 May, 2013 01:38 pm

    Two words.

    Coffs Harbour.

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  • gippsflyer

    gippsflyer

    3 May, 2013 01:24 am

    I think the best thing Virgin could do with Tiger is consolidate engineering support within the airline, and just focus on running high volume routes using low cost terminals or secondary airports, with seat only service (scrap ICE, food and beverage, charge for carry-on beyond small bag and for checked, etc). 

    A bare bones airline, in other words, for people who just want to get from A to B for the least dollars possible. 

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  • pika

    pika

    3 May, 2013 05:47 pm

    Qantas has substituted Jetstar on some routes.

    However, if it was such a big problem, Qantas could easily reverse that policy, and reinstate Qantas-branded flights. However, Qantas seems happy to leave it as it is.

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  • Waynec

    Waynec

    5 May, 2013 04:07 pm

    Hi there, I guess some routes don't justify a mainline Qantas service given the low yielding nature of these route as QF mainline has a much higher cost than JQ. It may be due to low levels of corporate bookings and passenger profiles on these routes.

    VA on the other hand stated publicly that it has a lower cost base than QF hence some routes that are not viable for QF may be viable for VA.

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22 May, 2019 03:38 pm

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