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Virgin planes are parked next to each other at Kingsford Smith airport in Sydney August 30, 2013. Virgin Australia Holdings Ltd reported a A$98.1 million ($87.6 million) full-year net loss on Friday, blaming difficult economic conditions, strong competition and one-off costs related to its recently acquired Skywest business. It also said major shareholders Air New Zealand, Etihad Airways and Singapore Airlines had agreed to provide a term loan worth A$90 million. The result contrasts with a well-received full-year net profit of A$6 million reported by rival Qantas Airways Ltd on Thursday. REUTERS/Daniel Munoz

Tiger Airlines is going to be available between Melbourne and Adelaide, Bali and Perth at cheaper rates, announced its parent company Virgin Australia. The service, which is expected to begin next year, is done in a bid to earn profit and to put it back on track after the business suffered heavy losses for a few years.

The existing Virgin Australia flights travelling to Bali will be replaced by Tiger Airlines. Virgin Australia is to transfer three of its Boeing 737 aircraft to TigerAir due to its current insufficient range.

According to the Australian, the number of routes between Bali, Perth, Adelaide and Melbourne would remain the same. However, return services from Perth to Bali would be available daily which was previously eight a week.

Last year, Virgin Australia airlines reported a total loss of AU$213 million that included Tiger Airlines’ loss of AU$69 million and Virgin Airlines itself losing about AU$49 million. Virgin Australia CEO John Borghetti said he hopes the new plans will transform and improve the business in the international front.

Tiger CEO Rob Sharp said low cost carriers’ competition was not only based on prices but also on the quality and reliability of the product. "We believe we'll be very competitive in that space," he said. "The business is really performing a lot stronger over the last 12 months and Virgin should be congratulated for how quickly they've managed to achieve this," said Morningstar analyst Ross MacMillan .

Nowadays, Bali has become a hot-spot for Australian holiday-makers due to availability of low cost airlines. The airfare to the island has gone down so much that it is now cheaper than airfares of domestic destinations such as Darwin or Cairns.

With the new plans, Tiger Airlines is expected to post their first profit earnings next financial year. However, the announcements came around when a number of Bali flights got cancelled until Thursday due to volcanic ash.

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