Tigerair looks to ancillaries to earn bit on the side

Tigerair Australia plans to roll out a number of innovations for passengers and advertisers.

Rob Sharp, right, says Tigerair wants to provide more positive add-on ­options for its customers. Picture: Kylie Else

The Virgin Australia-backed budget carrier Tigerair Australia plans to roll out a number of innovations for passengers and advertisers as it works to earn up to 25 per cent of its revenues from so-called “ancillary’’ sources in addition to airfares.

Chief executive Rob Sharp said the overhaul of the airline’s technology systems had allowed it to roll out more than 10 online initiatives to improve the travel experience for customers, and more were set to be announced.

The move comes as the airline is still negotiating to resume Bali flights after last month suspending all services following an unexpected decision by the Indonesian government to impose administrative requirements.

Mr Sharp said Tiger was also looking at better leveraging the “touch points’’ it had with customers through advertising.

“We have a lot of touch points with customers and we can monetise that through advertising,” Mr Sharp said in an interview with The Australian.

“If you go on to our website, an ad comes up. You print your boarding pass and there is an ad on the back. You come through the airport on to the plane, there could be a little logo there.

“That particular advertiser has a reinforcement of their brand 10 to 12 times through a customer’s journey.

“That is worth quite a bit of money to organisations. Getting people’s attention these days is harder.

“So reinforcing it through a journey is quite interesting. But you don’t want to do too much of it or you turn into a flying billboard.’’

Budget carriers have long earned a bad reputation world-wide for stinging passengers with a range of hefty charges for things such as extra baggage and late check-ins. Mr Sharp said that, ­although some of those charges would remain, Tiger wanted to provide more positive add-on ­options for its customers.

“We are in the process of leveraging a lot of technology investment to develop what I call value pools,’’ he said.

“Things that customers value and are happy to pay for.

“That way it is not a negative — you are not hitting people, you are giving people something they want.’’

Late last year, Tiger introduced mobile boarding passes, enabling customers to use their mobile devices to book, check in to and board their service.

The move finally brought it into line with Virgin Australia, Qantas and Jetstar in providing a mobile boarding pass option to passengers.

Tiger passengers can also now add a hotel reservation to their upcoming trip while booking a flight from the Tigerair Australia website as part of the airline’s partnership with booking.com.

Tiger also allows passengers to pay a fee to book increased cabin baggage up to 12kg, up from the standard 7kg, or pay more to get the security of being moved to the next flight without a fee if they miss the airport check-in cut-off for their initial booking.

“Over the next two years we are investing in these product options that will generate more ancillary revenues, which will create a sustainable, profitable business,” Mr Sharp said.

“We will end up with a sustainable business proposition.’’

Most established budget carriers generate up to a quarter of their revenues from ancillary streams in addition to airfares.

“We are closing the gap with the industry norm but we are not there yet because we came in with next to none,’’ Mr Sharp said.

Tigerair last year recorded earnings of $2.2 million, its first profit, one year ahead of schedule.

Virgin had previously tipped a first profit for Tigerair in the 2017 financial year.

Virgin took a 60 per cent stake in Tigerair in 2012, before taking full control in 2014.