The future of Tiger Airways remains in doubt as the aviation safety regulator grounded the troubled company for another three weeks and the airline’s Australian chief executive prepared to leave.
The move came after the airline stopped selling tickets yesterday following ACCC chairman Graeme Samuel saying that allowing sales to continue without a disclaimer on the airline’s trading position could possibly constitute misleading behaviour.
The Civil Aviation Safety Authority said yesterday it would extend the grounding of Tiger Airways until August 1 pending the approval of an application in the Federal Court.
“If CASA completes its investigations and determinations before 1 August 2011 and is satisfied Tiger Airways Australia no longer poses a serious and imminent risk to air safety it may be possible for it to resume operations earlier,” it said yesterday.
“The suspension of Tiger Airways Australia’s operations remains in place until either the Federal Court refuses CASA’s application or CASA withdraws it.”
CASA explained that the grounding is being extended because its investigations will not be able to be completed during the initial five-day ban.
Following the announcement Tiger said refunds would be given to passengers holding reservations between now and July 31.
It said chief executive Crawford Rix would leave the company on that date and he will be replaced by Tony Davis, group president and chief executive of parent company Tiger Airways Holdings.
Davis reportedly flew to Australia to take part in negotiations with regulators when the grounding was announced. He will remain a director of Tiger Airways but his former responsibilities will be undertaken by Tiger executive director Yau Seng.
Tiger says it is continuing discussions with officials and that it was never obligated to stop selling tickets in the first place, but analysts point out that the cost of the grounding will exceed $1 million a day and will prove a substantial financial hurdle.
Nevertheless, Tiger says it “remains committed to resuming services as quickly as possible”.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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