Australia’s airline safety regulator grounds Tiger Airways


Tiger Airways international chief executive Tony Davis was expected to fly in for crisis talks with the Civil Aviation Safety Authority this morning over the regulator’s decision to ground the Australian division of the airline.

Speculation about Tiger’s capacity to emerge from the crisis deepened yesterday as experts suggested each day on the ground made it less likely the airline would continue operating.

”Singapore Airlines [which owns a significant stake in Tiger] probably can afford to have them on the ground for a little while,” the vice president of the Australian and International Pilots Association, Richard Woodward, said.

”But no carrier can stand losses of $1 million a day for an extended period of time, as well as the cost of leasing airplanes and parking fees. After a few weeks, it would be unlikely they would re-emerge.”

Tiger last night told the Singapore stock exchange the ”cost impact” of the grounding was $1.5 million a week.

But while grounded, Tiger Australia is still taking bookings and accepting payments for domestic flights from July 9.

Travellers should be wary about booking on Tiger’s domestic flights, warned Consumer Action Law Centre campaign and policy director Gerard Brody, even though they’d be entitled to a refund should the flights be cancelled.

”It does seem an unusual circumstance for them to continue selling flights,” Mr Brody said.

Travel insurers might be reluctant to cover such bookings, too, he warned.

”I’m not sure what insurers will say and whether they will insure people who are planning trips with Tiger after July 9.”

As the Victorian and NSW school holidays begin, Tiger is facing a massive bill in refunding air fares – approaching $1 million a day while the planes are on the ground.

That’s based on an estimate of 60 flights a day, each carrying an average of 150 passengers, each having spent $100 on a fare and other ancillary charges.

Tiger’s passengers can apply for a refund, a credit for later flights or pay another airline to take them.

But Tiger faces a large task to rebuild faith among travellers if it is to have a future here, even if CASA allows it to fly again.

Virgin Australia has been inundated with requests from thousands of stranded Tiger holidaymakers who have been rushing to buy seats on flights.

Virgin has flown about 2000 passengers who held Tiger bookings and it’s looking to put on extra Melbourne-Brisbane and Melbourne-Gold Coast flights during the busy school holidays.

Qantas and Jetstar have each flown about 1000 Tiger passengers, mainly from Melbourne and Sydney for flights heading north.

But that’s just half the process, as the passengers will need to return home in time, too, and the airlines’ flights are already heavily booked with their own customers at this busy holiday time.