Tiger Airways' ambition to increase activity in Australia is set to put pressure on budget carrier Virgin Blue Holdings Ltd's market share. The low-cost carrier backed by Singapore Airlines plans to boost its market share from 7 per cent to 10 per cent next year and could more than triple its current number of nine planes in Australia by 2016, analysts say.

Virgin Blue is considered as more vulnerable than Qantas to a price war for leisure passengers because of the former's greater dependence on that market. It also does not have the same luxury as Qantas does in having a lower-cost division competing against Tiger.

Virgin Blue still has 80 per cent of its revenue exposed to leisure travellers despite the plans of its new chief executive, John Borghetti, to attract more from the business market.

''It is therefore likely to get dragged into the discount price war with Tiger and Jetstar, even while it attempts to push up into the corporate market,'' Royal Bank of Scotland analysts said.

''We're concerned how long that strategy [to grab a bigger share of the corporate market] may take to implement, while the rest of the business is subject to intense price competition.''

Virgin Blue announced in late May that revenue this year could fall 75 per cent and that it predicted average ticket prices to slump by more than 10 per cent from record lows.

RBS approximated Tiger's cost base as a fifth lower than Jetstar's, which gives the Singapore-based airline an edge in a price competition.

The analysts said Tiger had made a significant impact on the price-sensitive end of the market, while the premium-end, dominated by Qantas, had been steady. Since Tiger started in Australia in late 2007, discount leisure ticket prices had plunged by 36 per cent.