Tigerair permanently withdraws from Bali

A file image of a Tigerair Australia Boeing 737-800 VH-VUB at Melbourne Airport. (Brian Wilkes)
A file image of a Tigerair Australia Boeing 737-800 VH-VUB departing Melbourne Airport. (Brian Wilkes)

Tigerair Australia is permanently dropping flights to Bali – the airline’s only international destination – after reaching an impasse with Indonesian regulators.

The airline said in a statement on Friday afternoon it would withdraw from flying between Australia and Bali, effective immediately.

Tigerair had been trying to gain approvals to resume its flights to Bali from Adelaide, Melbourne and Perth since January 10, when the Indonesian government suspended the airline’s flights due to what it said was a breach of its charter permit.

The low-cost carrier had planned to resume services to the popular tourist destination on Friday, after announcing on January 19 it had secured “a key approval” to return to the route.

However, a statement posted on the Tigerair website at 2340 on Thursday said all flights to and from Bali scheduled for Friday had been cancelled.

And then on Friday afternoon, Tigerair chief executive Rob Sharp said the airline had been informed it required an “alternative regulatory solution” that, ultimately, left it with no other option than to withdraw.

“We have been advised by Indonesian authorities that in order to continue operating our flights to Bali, we would have to transfer to a new operating model that would take at least six months to implement and would compromise our ability to offer low-cost airfares to Australians,” Sharp said in a statement.

“Providing a reliable, low-cost service is critical for Tigerair Australia and our customers, and therefore our only option is to withdraw from flying to Bali altogether.”

Tigerair said Indonesian authorities told the airline it needed a particular air operator’s certificate (AOC) that was separate to the one it currently held to resume flights to Bali.

The airline described the process to achieve the new AOC as costly, would take six months to implement and also would put Tigerair’s takeoff and landing slots at Bali at risk.

Further, it was not a requirement for any other international market that Tigerair would consider operating to.

Tigerair said passengers booked to travel from Australia to Bali would be offered full refunds, while passengers due to return to Australia from Bali would be re-accommodated on other flights.

“We sincerely apologise to our customers who have been caught up in this and we will continue to work around the clock to support them as best we can,” Sharp said.

“We will continue to work with Virgin Australia to support any passengers still in Bali and needing to travel home to Australia.”

The end of Tigerair’s international operations comes less than a year after the Virgin Australia-owned LCC began services to Bali in March 2016, taking over flights previously operated by its parent.

It also means the LCC will have 14 Airbus A320s and four Boeing 737-800s now deployed exclusively on domestic routes, raising the prospect of potential overcapacity in an already sluggish local market, or alternatively a decrease in fleet utilisation that may lead to an increase in Tigerair’s unit costs.

Virgin’s second quarter trading update said it had flown five per cent fewer domestic flight sectors in the three months to December 31 2016, noting “subdued industry trading conditions in the domestic market continued to adversely impact revenue”.

Sharp said Tigerair was still committed to expanding its network with other international destinations.

“Tigerair Australia’s ambition to have a short-haul international network remains and we will now work towards alternative opportunities,” Sharp said.

The Civil Aviation Safety Authority (CASA) website showed the Tigerair AOC was most recently updated in November 2016 for three years.

A Tigerair spokesperson said previously the updated AOC gave the airline approval to operate international flights under its own AOC using its fleet of 14 Airbus A320s.

And it appears Tigerair has also received approvals to add the 737 as a fleet type onto its AOC as part of its transition from Airbus A320s to 737-800s over the next three years.

The first Tigerair domestic flight with the 737 took place on February 1, with VH-VUB taking off from Melbourne at 0831 and touching down at Cairns about three hours later at 1040 local time.

Indeed, flight tracking website FlightAware shows three Tigerair 737-800s – VH-VUB, VH-VOR and VH-VOY – have been operating domestic RPT services since February 1.

A fourth Tigerair 737, VH-VUD, appeared to be conducting training flights.

Tigerair Australia Boeing 737-800 VH-VUB at Cairns Airport. (Andrew Belczacki)
Tigerair Australia Boeing 737-800 VH-VUB at Cairns Airport after operating TT582 on February 1. (Andrew Belczacki)

Comments

  1. Kim says

    This sounds like a petulant dummy spit rather than an inamibity to meet the Indonesian regulatory requirements. Indonesia said that letting Virgin issue the tickets would have satisfied them, and they could still have used Tigerair branding and TT flight numbers.

  2. Bob says

    Time to give up on the 737 and concentrate on aircraft they have experience operating!
    What a waste of money the transition to 737 has been and tiger don’t even have a need for them anymore!

  3. Craigy says

    It would be interesting to hear Indonesia’s side of the story.

    So if there are no requirements for the 4 B738 aircraft for international flights, does that mean that 4 A320s will be removed from the fleet earlier than previously planned when they have enough B738 pilots trained?

    I guess Qantas will be publishing their 6 month financials soon for a comparison between Qantas domestic and Virgin.

  4. inherentchoice says

    So the CEO says “Tigerair Australia’s ambition to have a short-haul international network remains and we will now work towards alternative opportunities”.

    I’m thinking they’ll announce flights to New Zealand, Fiji and Sunshine Coast?

  5. Grant says

    The Indonesian side of the story is well known. Tigerair knowingly sold one-way tickets in breach of its charter licence, and tickets originating in Indonesia. It continued to do so even after Indonesia have it a warning. Obviously Tigerair have decided that, for whatever reason, they can’t (or won’t) fix a known bug in their booking system or let VA issue the tickets on their behalf until they got their own AOC.

  6. Andrew says

    The Indonesian Government has requested Tigerair operate flights to Bali in a seperate AOC like QF, JQ & VA (international) despite previous indications an Australian AOC would be ok, they’ve back peddled on that decision and as TT is only a small airline, the creation of a seperate international AOC would take upwards of six months and at considerable cost, as TT said, it wasn’t commercially viable – That’s it in a nutshell for those of you who haven’t read the article but felt the need to comment.

    p.s. the only losers here are the Indonesians and their Bali tourism industry.

  7. Ian Morris says

    The cynic in me cannot help but wonder whether all these issues from the Indonesian side are related to boosting the opportunities for Batik Air who are/were due to start Bali to Australia services soon…

  8. Mark says

    I wouldn’t trust the Indonesian government at all. All of a sudden they are taking attention of regulation, but they still have some of the most untrained flight crew in the world, with one of the worst safety records.

  9. Ben says

    Ian I suspect you are right.

    Look at what the Indons have done to SQ in Jakarta.

    They have made them cancel at least 1 flight a day, and have stopped them adding an extra flight, which was meant to go onto Sydney a few days a week. The reason? Runway works in Jakarta, with no end date.

    Oh and these runway works don’t seem to effect any other airline, only the SQ flights have been dropped. You would think if it were the case that other airlines would have had to drop flights too.

  10. pete says

    Tiger are being suggested here in south west WA as likely new provider to service soon to be upgraded Busselton Margaret River airport for direct flights from MEl , possibly in southern winter East coast to Broome for leisure market.

  11. Jared says

    From a rumour that ive heard, its possibly because they want the slots for an South East Asian airline to use, hence the polite way of saying move over. had tiger air Australia been owned by Singapore still would of not been an issue no doubt.

  12. Adrian P says

    The Indonesian Government has requested Tigerair operate flights to Bali in a seperate AOC like QF, JQ & VA (international), sounds like a requirement for a level playing field.
    Jetstar would be justified in complaining if Tiger was treated differently.

  13. Jeff says

    Yeah this is a shame for West Austalia, the carrier has now abandoned its Perth Bali service, and this aircraft will most likely be placed on international routes from the east coast now. Would be nice if tiger did a Perth to East Timor, Malaysia, Thailand, Cambodia service. One of them would be nice, or start some domestic flights in Kalgoorlie would be great connecting us to the East coast if they still want the aircraft in the East coast

  14. John Reid says

    Jet* do not operate from Canberra, and only since December 2016 Tiger fly from CBR only to Melbourne. Mainline operators fly (mostly twice-a-day weekdays) direct to state capitals except Hobart – to get anywhere else you have to change, adding time and cost. Mainline operators are clearly concerned that their own budget operators will cannibalise their more-profitable market

    I think that direct budget-operator flights CBR-Coolangatta, CBR-Hobart could do well, and both are something not presently available at all. Both should be within range of Tiger’s now-spare a/c types. Slots at Canberra do not seem to be hard to get.

    I also think that there is space for seasonal budget-operator flights to Sydney if slots could be found – I note that during tourist season the Murray’s hourly bus service is almost full every departure except the 0400 and 0500 – some of those people might prefer to fly but baulk at mainline-operator prices.

  15. Harrison Grohn says

    Sunshine coast flights!! The coast is calling out for you Tiger, We have to drive to Brisbane to fly with Tiger, Fly Local!

  16. john says

    Bali is a very low yield market.

    Tiger should start flying to Queenstown NZ or better still Invercargill.

    Although ZQN/DUD/IVC form an equilateral triangle, IVC is much closer by road to Queenstown than DUD is.

    Virgin seriously looked at flying to IVC.

    IVC doesn’t have to weather related problems that ZQN does & approaches to IVC much simpler as well.

  17. Jeff says

    I agree with John, invercargil would be an interesting choice. As long as the scheduled arrival allowed for bus transfers to Queenstown without the night in invercargill this could work.
    I like the creative routes airlines who enter into market that don’t have competition and airlines are willing to try and develop a market

  18. ian says

    you’d think that Tiger who supposedly have much lower cost than Virgin, would take over some of the Fiji flights.

    Jetstar flies SYD/NAN/SYD a few days of the week.

    High cost Qantas would never fly to NAN. They’ll leave it to Fiji Airways who is something like 46% owned by Qantas, but with much lower operating costs.

    + there must still be some thin NZ routes that Kiwi/Freedom used to fly that aren’t operated now.

    eg. Palmerston North, Hamilton

    + Roturua lost it’s OZ flights I believe.

  19. Philip says

    Why would anyone even consider travelling to Indonesia anyway.
    They just don’t get it that tourism was important.

  20. Jacob says

    Secondary markets in New Zealand would be well suited for international flights from the larger Australian cities. Like Ian said rotorua or even Hamilton, Palmerston North, Nelson or even invercargill could sustain some thin services. These could grow with marketing from tiger and no competition

  21. Jarden says

    Tiger has just recently pulled out of Sunshine Coast for the second time so I don’t think they will be back unfortunately.