Budget airline Tigerair will no longer be in operation after Virgin Australia announced its decision to the Australian Stock Exchange (ASX) this week.
Virgin Australia alerted the ASX on Wednesday morning, saying it plans to deliver a stronger, more profitable and competitive airline after going into voluntary administration amid the coronavirus pandemic.
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This plan includes cutting 3,000 jobs and pausing international flights until the world’s travel demands stabilise.
“Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes to ensure the Virgin Australia Group is successful in this new world,” Paul Scurrah, Virgin Australia’s CEO, said in the ASX announcement.
“We expect approximately 3,000 roles will be impacted as a result of the changes announced today. However, our intention is to secure approximately 6,000 jobs when the market recovers with aspirations for up to 8,000 in the future.”
The Australian reports those 3,000 workers will be offered unlimited standby travel for two years as well as the option of being sent a “special photograph” signed by Scurrah and Virgin Group founder, Sir Richard Branson.
Tigerair will be ‘discontinued’ but there’s suggestion it could return in the future
The plan also means discontinuing its budget subsidiary and Jetstar competitor, Tigerair.
“The Tigerair brand will be discontinued in the market as there is not sufficient customer demand to support two brands at this time,” the announcement read.
“Tigerair Australia’s Air Operator Certificate (AOC) and the resources necessary to support the AOC will be retained to support optionality to operate an ultra-low-cost carrier in the future when the domestic market can support it.”
Tigerair’s 125 domestic planes were grounded in late March after the country’s international borders were closed and interstate travel was either discouraged or effectively banned.
The discontinuation of Tigerair leaves Australia with just a single budget airline — Qantas’ budget subsidiary Jetstar. While interstate travel is off the cards for many of us for the time-being, it’s hard to know how pricing will be impacted once restrictions are lifted. Given Jetstar will have no real competitor now, it’s expected prices will rise to higher than pre-COVID levels.
However, Virgin’s ASX statement also revealed it’s holding onto the Tigerair brand in the event that domestic air travel sees a ‘return to normal’ in the future. As Scurrah said, that could still be more than three years away with current estimations.
Gizmodo Australia has contacted Tigerair to understand how it is dealing with the situation in the interim and if a date has been set for its discontinuation.
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