Tiger Airways set to deny setbacks

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Australian Broadcasting Corporation

Broadcast: 28/04/2011

Reporter: Michael Troy

Low-cost airline Tiger Airways Australia has had mass flight cancellations and a show cause notice from CASA but its future looks strong.


TICKY FULLERTON, PRESENTER: The low-cost airline Tiger Airways Australia has denied it is in breach of the Corporations Act for not yet filing last year's company accounts.

The airline argues its parent company is listed on the Singapore Stock Exchange and is only required to file only an abridged set of accounts here.

Tiger Airways has had a difficult time of late, but analysts believe the immediate future is assured for this very low-cost carrier.

Michael Troy reports.

MICHAEL TROY, REPORTER: Tiger Airways first clawed its way into the already overcrowded Australian market in 2007 with a very aggressive ultra low-cost model that prompted a price war that's not relented.

PETER HARBISON, EXEC. CHAIRMAN, CENTRE FOR ASIA PACIFIC AVIATION: Tiger Airways has got a lot to do with bringing the prices down in the first place. Its fares do tend to be consistently considerably lower.

MICHAEL TROY: Tiger's popular appeal took a hit over the Easter break when the airline cancelled several flights at short notice, leaving hundreds of passengers stranded and very angry.

However, Peter Harbison from the Centre for Asia Pacific Aviation says that's not unusual and people have shown they'll suffer inconvenience if it means a lower fare.

PETER HARBISON: It has too aggressive a route schedule, really, that other airlines wouldn't accept to fly with the number of aircraft it has. So it's pushing the margins in that respect.

MICHAEL TROY: Safety concerns have been raised, with the Civil Aviation Safety Authority issuing a show cause notice last month, one Tiger says it has responded to in full.

On another front, Tiger Airways Australia is being forced to defend itself against claims it's not complying with the Corporations Act, neglecting to file last year's company accounts.

In a statement, the company says, "Tiger Airways Australia is not a reporting entity in Australia because there are no users dependent on a general purpose financial report. Tiger Airways Australia does file an abridged set of accounts in Australia known as a 'special purpose financial statement' and we'll be filing this with ASIC shortly."

ASIC would only say it doesn't comment on specific companies.

Despite all the problems, Tiger Airways' immediate future here seems assured.

PETER HARBISON: Tiger Airways has the advantage that it does have what is currently a larger airline which is profitable, based in Singapore and that's underwritten its costs of entry into Australia. It's now getting, it appears, to a stage where it's currently on an operating basis, profitable or at least breaking even, so the fact that it does have that support behind it is enough to anchor it, I think, in the Australian domestic market.

MICHAEL TROY: The financial strength of Tiger Airways Australia should become clearer when their annual results are released on 19th May.

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Tiger Airways set to deny setbacks

Tiger Airways set to deny setbacks

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