Grounded Tiger Airways stops ticket sales
Wednesday 06 July 2011
Grounded Australian budget carrier Tiger Airways stopped selling tickets Wednesday after the airline came under pressure from the consumer regulator over its ability to deliver flights.
Australian Competition and Consumer Commission (ACCC) chief Graeme Samuel was tight-lipped on whether he was considering legal action against Tiger after it continued to sell tickets for next week in defiance of his warnings.
The airline was banned from flying domestically last Saturday until this weekend by aviation regulators over "serious and imminent" safety risks and could face a prolonged grounding if a court order is gained.
But Samuel said Tiger continued to sell flights until late Tuesday for next week without caveats - the earliest just hours after the ban expires - despite having no certainty that it would be allowed to fly.
"We had said publicly that they could continue to sell tickets only so long as they had a reasonable expectation of being able to provide the flights that they were selling tickets for," Samuel told AFP.
"It's a pretty simple proposition. If you don't think you can supply the flights then you shouldn't be selling the tickets."
The carrier posted a notice on its website Wednesday saying "flights have been temporarily removed from sale" due to its grounding by the Civil Aviation Safety Authority (CASA).
"Discussions with CASA regarding a resumption of services are ongoing and constructive," Tiger said, referring to crisis talks in Melbourne.
Samuel would not be drawn on whether the ACCC believed Tiger had breached trade laws, for which it could be fined more than Aus$1.1 million (US$1.17 million), saying only that they were in "continual and constant communication".
"I won't say any more than that, but suffice to say we're not just going to sit back and wait and see how things transpire," Samuel said.
"I frankly was bewildered that they seemed to be ignoring the advice and the exhortations that I was giving them and other regulators were giving them, both in public and in private," he added.
"It didn't seem to me, if I could venture the opinion, to be terribly good business practice to be selling tickets without at least saying to customers 'look, you ought to be aware if you are buying these tickets there is a risk that we may not be able to provide the flights and we may have to cancel'."
Samuel said it was not enough for Tiger to offer cash back if customers were unable to fly next week because their refund process was so slow, in some cases "several months", leaving people out of pocket and scrambling for new tickets.
"And of course Tiger has the advantage that it's got the money sitting in its bank account either earning interest or saving in interest as the case may be," he said.
CASA expects to decide before Friday whether to apply for an extension of the current ban, which is costing Tiger US$1.6 million a week and has thrown the travel plans of some 35,000 people into disarray.
The local subsidiary of Singapore's Tiger Airways, it was threatened with suspension earlier this year after failing to address issues of pilot proficiency, training and checking, and fatigue management.
It is the first grounding of an entire airline due to safety issues in Australia's history.
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