Tiger airways have a few critical issues which could be solved. Tiger airways did not seem to have a very good relationship with their consumers. For one, despite the attempts to connect with the consumers through social media sites like Facebook and Twitter, consumers were regularly complaining about the company on these sites. Instead of clarifying matters and executing a good customer relations strategy, Tiger deleted negative comments off their official Facebook page and remained silent for 72 hours after the grounding took place. Tiger also allowed an Australian television channel to air a program documenting all the negative and dismal areas of Tiger’s operations. All these actions only served to reduce consumer confidence and trust. With consumers being the driving force behind Tiger’s profitability, the company should focus on building goodwill and trust, and in light of the grounding, to also reassure them of their values of low cost and safety.
The solution is to offer complimentary flights to affected consumers and make use of this opportunity to build good relations with them. Tiger can also turn this into an opportunity for positive media coverage showing the company’s sincerity in righting the wrongs. Encourage two-way communication between tiger and its stakeholders. Start being more proactive in communicating with consumers and anticipate their grievance. Come up with a contingent communication strategy and how to deal with consumers to build goodwill and trust. Or they can improve the consumer hotline and reassure customers about their safety by hiring a third party to vouch for them (ingratiation strategy). Tiger airway is also facing issues with the investors. As soon as the grounding took place, Tiger’s SGX stock price plunged, showing a lack of confidence on the part of investors. Interesting to note was that share prices continued to plummet even after tiger resumed its flights.
This would not probably be because airline capacity was still low due to consumer doubts about the airline’s safety. The only way investor’s confidence can be improved is by first gaining the support of consumers because they are the ones fuelling tiger’s profitability. With a lack of consumer support, investor confidence will be equally weak as they would not see any growth prospects or returns from their investment. Hence, this problem can only be fixed over time and is dependent on tiger’s ability to convince consumers of safety of their flights.
It has to work on building strategic credibility in the long run. In the meantime, tiger should provide a short-term solution to calm investors and convince them their investments will be worthwhile. Solution to this is that communicating to all stakeholders about what exactly tiger airways us trying to do to gain consumer’s confidence and increase transparency, whether regarding tiger’s financial losses or the real reason behind the grounding. Assure investors that Australia is a profitable region worth investing in and thank them for their loyalty to the company. Another solution is capitalized on SIA’s reputation to gain investor confidence.
Inform investors that SIA holds majority of the shares in tiger airways and they still have confidence that tiger airways will be able to get back on its feet soon. As CYS is taking over as CEO, tiger can capitalise on his reputation by mentioning that the company will be in good hands given that CYS is from SIA and has experience leading a world class airline. Tiger airways should also focus on building consumer confidence and assume investor confidence will improve from there. In other words, maintain status quo and remain silent.
Lastly, being a budget carrier, low fares of priority to Tiger. Just like wal-mart, this drive to attain lower and lower costs results in employee neglect. Pilots became overworked and underpaid, and employees were either offered redeployment to other bases or given redundancy packages during the period of the grounding. Some employees even threatened legal action against the company when tiger did not make the payments required to them. Employees are no doubt an important group of stakeholders in any company, as can be seen from recent cases of worker strikes causing huge airlines such as Qantas to halt operations and experience significant losses. As company already in the red, anymore losses resulting from employee mistakes or strikes will not bode well for the future prospects of Tiger, especially with it being a budget carrier. There is no other option for tiger but to build up their relationship with their employees.
Possible solutions is to provide greater benefits to employees such as off-days for a flight lasting for a number of days, to prevent employees from being overworked and making unnecessary and costly mistakes. Increase employee welfare by providing channels for them to air their grievances and implement a two-way communication system where their problems or difficulties can be sorted out. Apologising for their inconvenience and mistakes made in the handling of the situation and assure the employees of the steps the company is taking to clean up the crisis. Engage employees’ help to build up the reputation and trust of the company by first treating them better and allowing them more channels to communicate with management. Tiger airways are a low-cost airline whose corporate strategy is centred on cost-cutting measures.
The grounding, however, serves as a reminder of the importance of the airline’s safety. Tiger’s flawed corporate strategy could also be seen when they failed to take CASA’s show cause notice in May seriously, leading to the eventual grounding of their entire fleet. Although it can be said that tiger’s reputation is derived from their low fares, it is the basic prerequisite for airlines to ensure safe operations. This is where they differ from Wal-mart, which has a similar ‘Everyday Low Price’ strategy. Improving their strategy would serve to improve tiger’s reputation in the long run. Solution to it is to increased transparency of tiger’s operations. Update stakeholders regularly with a list of actions that tiger airways will undertake in the following months to improve safety, and also prepare a crisis communication plan this is updated regularly.
Tiger airways should work with CASA to come up with safety regulation guidelines that complement tiger’s low-cost strategy. Of all the critical issues being mentioned above, it is in the best interest of the company to choose to improve on the relationship with consumers. Tiger should understand that two-way communication and dialogue is pertinent in establishing mutual trust and loyalty amongst consumers. Neglecting their social media feeds in their time of crisis resulted in a missed social media opportunity for the company. Tiger should have taken advantage of the instant communication provided by these social media outlets to convey important messages to consumers during the crisis and answer all their queries and allay concerns immediately. This would definitely reduce the frustrations felt by consumers arising from the silent approach employed by the company.