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)