Tiger Airways: endangered but not extinct
In this guest post, Tim Riches argues why Singapore’s Tiger Airways can find its way back from the brink in Australia
Whenever you read anything in the paper about Tiger Airways, there’s a presumption they’ll really struggle to get back on track in Australia.
But I’m not sure we should write the brand off just yet.
What I’m not talking about is the difficulty in terms of making money, which considering that Tiger posted a multi-million dollar loss in the last financial year, and I suspect hasn’t yet made money in the Australian market, is no small matter.
Against a backdrop of rapid growth of low cost carriers globally in the last few years, and with something like 20% of domestic capacity being delivered by low cost carriers, I think it’s possible to remain open minded.
Here’s why I reckon, with the right moves in the short term, the brand can come back.
Are people genuinely scared of crashing? I don’t think so. In the absence of any recent crashes in the local market, or really even in our region, it’s not like plane crashes are “top of mind” at a whole of category level, low cost carrier level or Tiger brand level.
If anything, it’s the Qantas brand that’s been in the news on this front, due to the usual sorts of relatively minor issues that are part and parcel of air travel. The Civil Aviation Safety Authority is seen as pretty assiduous in the discharge of its duties too – so I doubt there are strong suspicions of low cost carriers that are permitted to fly in the Australian market.
The Singapore Airlines parentage, while typically described in a slightly sinister “Singapore Inc” way in the business press, is a huge reassurance for most Australians. The operational efficiency and quality associated with that brand is high, and many people think “they’d never allow something bad to happen”. Let’s hope so anyway.
Low cost carriers have impacted the category in all sorts of ways. They’ve democratized flying and grown the market enormously. They’ve conditioned large chunks of the market to buy on price in various quite specific “sales” modes. They have put the focus on the accessibility of the destination, and de-emaphasized the journey (kind of the polar opposite of ocean cruise liners). The planes are usually pretty new. The destinations are typically short haul. Some “premium” destinations are only served by low cost carriers anyway – try flying to Hayman business class for example, even though you pay $1,000 a night when you get there.
So in the course of that, flying really has become commoditized in terms of the experience, especially cattle class, and brands have become less and less important.
So while the Tiger brand was never a “good” one, the upside is that little has been lost.
I see few reputational barriers to them regaining their slice of the market with smart steps along the way back. Perhaps things like:
Providing tangible reassurances that leverage the parent brand. Now my guess is that major shareholder Singapore Airlines won’t love this idea as it’s probably lowering the water level in their reservoir of goodwill, but the reality is their recent interventions have put their ownership on the radar anyway.
I’d recommend talking up as much of their corrective action as possible, being specific in why past errors won’t happen again, and bringing in a Singapore Airlines attitude to safety and even efficiency. I reckon there are plenty of people who suspect that the Australian regulatory environment is pretty stringent anyway, and the other airlines often go to some lengths to point out the “technical” character of infringements that hit the media, so the substantive safety fears a relatively few
Build some kind of brand. Low price is key, but “owning” pricing transparency (no hidden fees) innovating around the core commodity to create points of difference are things that may develop some kind of brand preference. Tiger is really an online business. Digital interactions surely seem to be the medium in which value may be added – better booking experience, more clever add-ons and up-sells, cross-promotions, innovation in areas like group or bulk buying linking to destinations and events (“the footy plane”) and so on.
Understanding the customer pain points – I’m talking inconveniences rather than fiery immolations – so things like baggage pricing, communication around timeliness, service culture. If they can mitigate the negatives that people tend to talk about, PR these customer satisfaction drivers and improving performance against them aggressively – like the banks did a few years ago – then they create a more wholesome atmosphere for their brand to grow in. Not crashing would be a good idea too.
Tim Riches is the MD of market research consultancy The Leading Edge Sydney
topics
Tiger Airways
Tim – positive or negative first experience with the Brand is going to be the greatest driver of their success. I have made it my mission to tell as many people as possible how terrible they are – having been stranded away on a ‘cheap’ holiday, with Tiger’s own travel insurance not worth a thing. The more people that fly them – the greater the chance they will fail… as current management doesn’t actually value their customers… but rather sees them as ‘suckers lining up to be fleeced’
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Agree it would be hard for Tiger to fall any further.
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Well, as I always tell my clients, ‘I’m not a one-man focus group’ (for those that still believe in focus groups, that is) but when recently planning a trip to Melbourne, I completely wiped Tiger out of contention. For me, it was about the lowest price I could get from Virgin or Jetstar. Why? It’s not the service – I’ve flown Tiger before and had no issues. It’s the safety factor. Are they likely to crash? No. Am I willing to pay an extra couple of hundred bucks (return) for the peace of mind I’ll get going with either of their competitors? Yes. And unfortunately, they seem to know this and have jacked their prices accordingly.
So for me, it’s now about Jetstar and Virgin – and preferably the latter, as they’re a far more positive lot who seem to actually enjoy their jobs.
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Tim, you seem to be describing a scenario similar to rearranging deck chairs on the Titanic.
All you say has some semblance of credibility in isolation and applied meaningfully from the get-go.
However, when each aspect of what you outline has been over promised, under delivered and contorted by Tiger, then you’re left with a failed brand and an impossible brand redemption. It’s poisoned.
SQ should start again, with a new brand and this time do it more intelligently.
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