World

Tigerair Australia quits Bali permanently

SYDNEY Tigerair Australia has said it would quit flying to Bali permanently after being told by Indonesian authorities to switch to a new operating model.

It said switching to a new model would take about six months and be prohibitively expensive.

"Providing a reliable and low-cost service is critical for Tigerair and our customers, and therefore our only option is to withdraw from flying to Bali," its chief executive Rob Sharp said in a statement.

The budget unit of Virgin Australia Holdings, accused of breaking charter flight rules, had its permission to fly revoked last month.

UNCERTAINTY

The developments have underscored uncertainty about Indonesia's flight approval process and raised the question of whether others, particularly Indonesian airlines, will step in to the fill the gap.

"What surprises me most is the confusing and short notice decisions of the Indonesian authorities," said University of Sydney Business School's Professor of Transport Rico Merkert.

"Tigerair can deploy the aircraft on another route, but Indonesia is losing vital tourism revenue."

Australian tourists are the holiday island's biggest market. Bali saw 1.1 million Australian arrivals last year.

The decision by Indonesia's regulators comes just weeks after Batik Air, part of Indonesia's Lion Air Group, received a licence to fly to Australia.

A Lion Air spokesman said Batik Air was aiming to start flights to Perth as early as next month.

Qantas Airways budget offshoot Jetstar, the biggest carrier between Australia and Bali, said it would keep a close eye on demand for the routes Tigerair had exited and look at its options.

Tigerair offered nearly 180,000 one-way seats a year, although not all were filled.

Virgin said it has no plans to operate the Bali routes from which Tigerair had withdrawn. It declined to comment on the financial impact of pulling out.

Prof Merkert and Mr Peter Harbison, executive chairman for the CAPA Centre for Aviation estimated the impact on Virgin Australia at several million dollars. - REUTERS

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