Grounded Tiger Airways Australia on Friday agreed to refund all tickets for August, but aviation regulators said the move did not mean the airline was facing further delays in returning to the air.
The carrier has been grounded until at least August 1 by the Civil Aviation Safety Authority (CASA) over "serious and imminent" risks linked to pilot proficiency and training, fatigue management and other issues.
It had agreed to refund all July tickets while it awaited permission to fly again, and consumer watchdog chief Graeme Samuel said Tiger Airways Australia had now extended the refund offer for all of August.
"We have managed to secure from them an undertaking that for August flights, where there's still some uncertainty as to whether they will be able to fly, they've agreed to provide some flexibility," said Samuel, head of the Australian Competition and Consumer Commission.
"So they're saying to customers now 'if you've booked an August flight you can elect to cancel that flight," he told AFP.
Samuel said customers could cancel their flights up to seven days after Tiger resumed flying.
"Undoubtedly a part of that is to try and restore and retain goodwill with customers," he said.
CASA said it was a commercial decision and not driven by any developments in the ongoing safety investigation.
"From our point of view we're still working our way through all the issues that we've identified previously and we will continue to do that," said CASA spokesman Peter Gibson.
"We've told Tiger we want them grounded until August 1 to complete the investigations and that's the timetable we're working to."
Tiger was grounded for a month after two flights came into airports too low in June. It had already been on notice to improve its safety performance.
An Australian offshoot of Singapore's Tiger Airways, the low-cost carrier has vowed to do everything necessary to resume flying and said it had the absolute backing of its Asian parent firm.