SINGAPORE'S budget airline Tiger Airways has sparked an airfare war in Australia's domestic market, by announcing a new range of cut-price fares.

From Nov23, the airline will offer direct routes from Melbourne to the Gold Coast, and the cities of Rockhampton and Mackay in Queensland.

Three daily flights will link Melbourne and the Gold Coast, while four flights a week will link Rockhampton and Mackay to Melbourne.

A one-way ticket from Melbourne to the Gold Coast will cost A$49.95 (S$65), with the other routes costing A$59.95.

A check with Jetstar's website yesterday revealed a best price of A$109 for a one-way flight next month from Melbourne to the Gold Coast.

Tiger Airways' announcement yesterday in Melbourne was immediately followed by Jetstar offering 10,000 seats from the Gold Coast to Melbourne for A$1 next February, as a special for customers signed up to its subscription service.

They were snapped up within two hours, Australian media reported. Other A$1 routes offered took in those cities targeted by Tiger - Rockhampton and Mackay.

But Tiger Airways chief executive Tony Davis yesterday told the Australian Associated Press that his carrier - a subsidiary of Singapore Airlines - has invested in Australia for the 'long haul'.

'It's the others who are running around like headless chickens,' Mr Davis said on the Gold Coast at the launch of Tiger's foray into the Queensland market. 'You've got to ask who's reacting to whom? Anyone can offer a gimmick fare for a couple of hours to a selected group of users.'