Budget carrier Tigerair a 'no brainer' for transtasman to complement Virgin Australia

Tigerair is moving from a mixed fleet of A320s and 737s to an all Boeing fleet. Photo / Supplied

An aviation expert is confident Virgin Australia will launch its low cost airline Tigerair across the Tasman next year.

Peter Harbison, executive chairman of CAPA – Centre for Aviation, says he is ''99.5 per cent certain'' that Tiger will come into the market.

''It's almost a no brainer that they should move on to the Tasman,'' Harbison said at a CAPA aviation and corporate travel summit in Auckland.

Virgin's group executive Rob Sharp last week held open the possibility of the budget carrier flying here.

'It is an option transtasman. We are first focused on bedding down the relaunch and raising brand awareness (of Virgin Australia) as our first priority,'' he said.

''Tiger is an option to bring across - it's a part of our armoury but we're not rushing at doing this.''

Virgin Australia is going its own way across the Tasman from next weekend following an acrimonious break up with Air New Zealand, with which it had a joint venture for more than six years.

Virgin is restoring full service including meals and bags as part of the ticket price throughout the plane to an expanded network from next weekend. This gave it scope to bring in its budget arm, said Harbison.

''Virgin wants to be positioning itself as different from Air New Zealand and now has got the product to do that and it can (also) get into the market with the low cost product.''

Air New Zealand has a hybrid product on the Tasman in its Seats to Suit range. That allows passengers to pay for the full service option or save by not paying for any extras at all.

While the airline says it is one of its most successful initiatives, Harbison said airlines risk damaging their overall brand by combining full service and low cost within the same plane.

He said the Qantas Group approach - full service on Qantas planes and low cost in Jetstar - was one that ''patently'' works.

''They (Virgin) really could drive a really good segmented product in this market. It will take a year or two and if they're able to keep their product up to that level and project that image then there's definitely got to be space for a low cost carrier.''

Air New Zealand's chief revenue officer Cam Wallace said Virgin's response of increasing capacity on existing routes and starting some new ones was predictable but his airline had expected it to launch Tiger at the same time.

''Virgin hasn't announced anything that surprised us or shocked us - the only thing we are a bit surprised about is that they haven't deployed Tiger we thought it could one of their options,''he said.

Tiger flies domestic Australia routes and since 2014 has been fully owned by Virgin.
The airline operates four all-economy Boeing 737-800s alongside the 12 Airbus A320s but is moving to an all 737 fleet.

Tiger has had some bad press for service and on time performance but Harbison said the airline had improved since Virgin had taken full control.

A survey earlier this year by a travel website found Tigerair to be the cheapest carrier per kilometre in the world, largely because of the long distances it flies in Australia.