Tigerair tipped to stay grounded even if Virgin Australia takes off

Aviation experts have made a bold prediction on the future of the low-cost carrier as about 20 high-quality bidders circle its parent company Virgin Australia.

TIGERAIR may have taken to the skies for the final time with prospective buyers of Virgin Australia unlikely to resurrect the controversial brand, industry experts say.

Tigerair Airways Australia collapsed into administration alongside its parent company Virgin Australia Holdings last week.

Deloitte says about 20 bidders are circling the Virgin Australia brand, eager to take over the running of Australia’s second domestic airline.

What role Virgin’s low-cost carrier Tigerair will play in any takeover is unclear, but administrators have suggested all options are on the table.

University of New South Wales School of Aviation Professor Tony Webber said the brand had few redeeming features.

“It’s got a really poor on-time performance, the worse of any airline in the domestic market,” he said.

“Tigerair in my view doesn’t have a future in Australia … based on the financial performance alone and the fact it can’t make any headway on Jetstar.”

Tigerair routes were cut prior to the COVID-19 pandemic.

Dr Webber said with ultra-low-cost carrier Indigo Partners eyeing there Virgin Australia Group, there would be little reason for Tiger to exist.

“I think Virgin Australia will come back as a low-cost carrier and there won’t be any room for Tiger,” he said.

On Friday Tiger International Number1, a dormant entity which was previously a guarantor of unsecured notes, was put into administration.

Strategic Aviation Solutions chair Neil Hansford tipped Tigerair would fail to takeoff again even if Virgin Australia is purchased.

"My prediction is if anything survives it will be a small airline of about 3000 people and it will be in the ultra low-fare area,” he said.

"They've already made the people redundant so why do they still talk about the Tiger brand?”

Calls for Virgin to ditch the tainted Tigerair brand were growing louder one month before the COVID-19 pandemic rapidly spread across Australia.

In March Virgin Australia announced five routes flown by the low-cost carrier would be cut, its Brisbane and Sydney bases closed and fleet numbers reduced.

That prompted Brand Institute of Australia CEO Karl Treacher to declare it would “take a miracle to turn Tigerair around”.

“In 2019 Tigerair was found to have the unhealthiest reputation in the airline sector – worse than Malaysian Airlines,” he said.

“From the 100 most recognisable companies in Australia it finished 98th with only Adani and Centrelink faring worse.”

Dr Webber said it was not surprising 20 bidders were eyeing-up Virgin Australia.

“The domestic business over the past five years it’s been reasonably profitable,” he said.

“There’s money to be made, all it has to do is take some cost out of the business, remove the international part of the business excluding the Tasman and just reposition itself as a hybrid carrier.”