Tigerair is pulling out of Bali from Perth, Adelaide and Melbourne after weeks of fruitless negotiations with Indonesian authorities.
The airline was set to resume flights today after reaching an in-principle agreement with Indonesian authorities, but that deal fell through.
The initial issue revolved around authority to operate Boeing 737s leased from its parent Virgin Australia that was granted in March last year.
Last month the Indonesia authorities revoked that permission which forced the cancellation of dozens of flights and left thousands of holidaymakers stranded and plans to visit the holiday isle in tatters during the peak holiday season.
Negotiations for the airline to use its A320s have fallen through, and the Indonesia authorities want the airline to apply for a new International Air Operators Certificate to operate the 737s – a process that would take six months and cost millions.
All other countries accept Tigerair’s domestic AOC issued by our regulator CASA.
The airline made the announcement in a statement today.
“The Indonesian authorities have informed Tigerair that they require an alternative regulatory solution for Tigerair’s operations to Bali. This solution would take at least six months to implement and would compromise the airline’s ability to offer low-cost airfares to travellers to Bali.
As a result of this development, Tigerair Australia has today made the difficult decision to withdraw from flying between Australia and Bali permanently, effective immediately,” the statement read.
Virgin Australia will examine the viability of introducing flights from Perth, Adelaide and Melbourne to Bali.
Last month Tigerair chief executive Rob Sharp accused the Indonesians of not honouring a 12-month agreement struck in March last year.
That agreement allowed Tigerair to lease planes and crew from its parent, Virgin Australia, and operate to Bali from Perth, Adelaide and Melbourne.
Under the agreement, the airline is not able to sell tickets in Bali to those Australian destinations.
Sources in Jakarta said that the Indonesians had moved oversight of the agreement from the department that looks after regular passenger flights to one that handles charter flights.
This changed the rules by which the airline operates to Bali and means the company is breaching the rules.
Almost all airlines lease planes, often with crew — particularly pilots.
