Virgin Australia: How will voluntary administration impact Tigerair?

The low-cost carrier has quietly disappeared from the radar as Virgin Australia’s woes worsened. If Virgin manages a comeback, will Tigerair fly again?

The coronavirus pandemic’s impact on airlines was swift and drastic. So too were the calls airlines had to make in response.

As the escalating crisis led to bans on non-essential travel last month, Virgin Australia suspended almost all its domestic and international flights. It also halted all operations of its low-cost domestic arm Tigerair Australia, effective immediately.

Virgin Australia’s woes worsened since then and this week, the airline went into voluntary administration. While there is some optimism the airline will make a comeback, little has been said about Tigerair, which has slipped quietly into obscurity.

So will we see Tigerair Australia fly again?

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Right now, Tigerair flights remain suspended indefinitely. All its pilots were made redundant in a restructure announced by Virgin Australia in March.

The remaining 240 Tigerair cabin crew and office workers are among the 10,000 direct employees of Virgin Australia whose jobs still hang in the balance as it enters administration.

While Virgin Australia’s future is unclear, so too is that of its budget carrier Tigerair. Picture: James Gourley/AAP

News.com.au has confirmed Virgin Australia chief executive Paul Scurrah told staff in a group briefing on Tuesday that Tigerair would remain an important part of the company as it emerged from administration. That extended to Velocity Frequent Flyer, which is a separate company in the group and is not in administration.

In that case, Virgin Australia pilots will operate Tigerair’s fleet of Boeing 737s, with its Airbus A320 aircraft to be retired.

Administrator Vaughan Strawbridge from Deloitte also told Virgin Australia and Tigerair staff in the briefing there were no plans for further redundancies.

But as administrators help the debt-ridden company reshape, it remains an anxious time for Tigerair staff and their Virgin Australia colleagues.

“I would say that they’re apprehensive rather than relieved,” Flight Attendants’ Association of Australia industrial relations manager Stephen Reed told the Sydney Morning Herald.

“A lot of current Virgin and Tiger employees are ex-Ansett, so there’s a lot of trepidation.”

It isn’t just Tigerair crew who are keenly awaiting news of the budget carrier’s future. There are concerns nationwide about how Virgin Australia’s current woes, and even its possible restructure and return, will impact important regional routes that Tigerair plays a key role in operating.

Grounded Virgin Australia aircraft at Sydney Airport on Wednesday, a day after the airline went into voluntary administration. Picture: Cameron Spencer/Getty Images

Tigerair is the only low-budget airline servicing Canberra, and the ACT Chief Minister Andrew Barr said the loss of the carrier could have a devastating impact on local tourism.

“A second viable airline in Australia is fundamental to the ongoing strength of both the ACT’s tourism industry and tourism in Australia,” Mr Barr told local outlet RiotACT.

“The Canberra-Melbourne and Canberra-Brisbane routes were among Tigerair’s most successful routes and a very significant part of driving domestic tourism for us.

“(Virgin) had very extensive coverage and they were an airline we were talking to about trans-Tasman services.”

Tigerair provides important links to regional centres.

Another tourism hub, Coffs Harbour on the NSW mid-north coast, lost flights to Sydney and its only link to Melbourne when Tigerair routes were axed in February.

“It’s a sad day for the Coffs Coast,” Martin Wells from the Chamber of Commerce told the ABC at the time.

“We aren’t too excited about losing that affordability for tourism.”

Virgin Australia acquired Tigerair in 2014 as it shed its budget origins and grew into a full-service airline. It paid Singapore Airlines $1 for full ownership of the discount carrier.

Tigerair Australia, based in Melbourne, operated domestic routes to Australia’s capital cities and key regional centres.