Being Australian I always try and keep an interest in what is happening downunder, even though I live on the opposite side of the globe. I’ve seen a few articles recently about the upcoming IPO of Tiger Airways, but one in particular surprised me. I know I’m not a qualified accountant and it’s not an everyday habit to read in detail an airline’s financial statements, but is adding the R into EBITDAR really a legitimate way of expressing the financial state of a company? Maybe I need to do a refresher course in financial statement analysis!
Tiger’s Ebitdar (Ebitda before rent expenses) in fiscal year 2009 was S$13m, a margin of 3.5%. AirAsia and Ryanair, which are larger and have longer operational histories, had Ebitdar margins of around 38% and 26%, respectively, in their 2009 reporting periods. Tiger’s IPO prospectus forecasts FY2010 Ebitdar of S$90m–$110m.
What I am really interested in today is not the financial performance of Tiger, but the online booking flow. Tiger are hosted in Navitaire, just like Virgin Blue and the Qantas owned LCC Jetstar. For readers unfamiliar with the airline, here is a route map taken from their website.
Their homepage is fairly standard, but it was when I actually started searching for flights that I saw some interesting things.
Those who read this blog regularly will know my views on credit card surcharges, but what Tiger have done looks like they have taken a page from both the Ryanair and Allegiant playbooks. By the way, did you see the UK Office of Fair Trading come out swinging against Ryanair over credit card payment surcharges recently? Peronally I’m on the side of Ryanair in that stoush. As a consumer the Tiger/Ryanair stance turns me off, but if passengers are happy to pay a penalty for not holding some obscure payment card (maybe less obscure in the case of Tiger) then so be it. The real problem I have with the credit card surcharge (let’s forget calling it a convenience fee) is the size of the font on the Tiger website. I’ve made it larger in the image here, so don’t take this as an exact screen shot. Even with my decent eyesight I had to move a little closer to the screen to read the actual website version properly.
But my biggest question about the site is the way they have integrated insurance from Chartis into the booking flow. Tiger have broken one of my virtually unbreakable rules in airline website design; never let the user click his way out of the booking flow prior to purchase. Maybe one day someone will give me a justifiable reason to reassess this rule, but the way Tiger have done it with insurance is not one of them. That said, I did go and look at the other main Australian airline websites (JQ, QF, DJ, VA) and it didn’t take long to find that all bar one broke the same rule at some point in their booking flow, although sometimes with other items rather than with clicks inside the insurance panel – not that there is really any difference, although if you have to do it, I’d guess that later in the flow may be the less problematic option. Fixed width pop ups activated by a link are OK, but full size new windows or new active tabs risk losing the attention of a potential buyer and increase the risk of time outs. Airlines spend a lot of money getting people to their websites in the first place, so whenever you make it easier for the person to get distracted and leave the booking path, questions must be asked.
A bigger problem than taking me out of the booking flow, especially at an early stage in the process (most of the Australian websites offering insurance did so prior to the passenger details page), is to take me out of the flow to show me an error screen, as Tiger (or more correctly Chartis) did.
I was using Chrome 3 in Windows XP when visiting all of the sites in this quick analysis, so whilst not as common as IE, it is hardly an obscure browser. Just to double check the error screen above I did try replicating it in IE 8 and I got an error screen from https:// aigtravel.com.au/Resources/ AIG/PDF/ Duty%20of%20Disclosure.pdf. It looks like AIG is trying to redirect to http:// chartistravelinsurance.com.au but for whatever reason it is not working and at least when I tried doing it a few times I was unable to view the Duty of Disclosure or the Combined Product Disclosure Statement, Policy Wording and Financial Services Guide. Probably not an ideal legal situation to be in when selling insurance in a regulated marketplace.
So that is my quick review, and I didn’t even get time to write about the Tiger version of a calendar display or the integration of any of the ancillary products for sale on the web like cars from Hertz or hotels from Lastminute. If you work at Tiger don’t take my analysis too close to heart. I’m sure if I spent half an hour looking at your competitors I’d also find plently to write about – but you are in the spotlight due to the IPO, so today it was your turn to be the lucky candidate for a closer inspection.