Tigerair pulls out of Bali
Virgin Australia’s strategy to direct its low-cost Tigerair Australia offshoot to lower-yielding leisure routes hit a significant speed bump last month after a dispute with Indonesian authorities ultimately led to a decision to withdraw Tigerair from the Australia-bali market. Announced with a fanfare about 18 months ago, the services involved rebranding existing Virgin Australia 737 aircraft, with Tigerair also utilising existing capacity allocations on the Indonesia route previously held by VA. The services operated from Adelaide, Perth and Melbourne to Bali – but a regulatory glitch saw the flights suddenly stalled in January as negotiations were undertaken regarding an issue with the Tigerair AOC. At issue was apparently the status of the services as charters, rather than regular scheduled flights which restricted the sale of one-way tickets. According to Tigerair Australia, a regulatory solution proposed by Indonesian authorities would have taken at least six months to implement, and would compromise its ability to offer budget airfares to travellers. “Providing a reliable, low-cost service is critical for Tigerair Australia and our customers, and therefore our only option is to withdraw from Bali flying altogether,” concluded the carrier’s ceo Rob Sharp.