Grounded Tiger Airways Australia to offer compensation to passengers

Tiger Airways A320. Photo: By Rob Finlayson.

Passengers booked on flights through August on grounded Tiger Airways Australia are now entitled to a full refund after a deal brokered by the Australian Competition and Consumer Commission. The airline, grounded until at least Aug. 1 over safety concerns, was resisting passenger demands for refunds for flights booked next month.

On Friday, Australia's consumer watchdog received a commitment from TT on remedies it will offer passengers affected by the suspension of flights. "The ACCC decision to accept this commitment from Tiger Airways provides clarity to affected consumers and ensures that they are not left out of pocket," said ACCC Chairman Graeme Samuel.

On July 1, the Australian Civil Aviation Safety Authority suspended TT's air operator's certificate. CASA applied to federal court to extend the suspension to Aug. 1, a move agreed to by the airline (ATW Daily News, July 8). As a result of its suspension, TT, a subsidiary of Singapore-based Tiger Airways Holdings, is not selling tickets.

ACCC, together with other Australian consumer law regulators, have raised various concerns in relation to the treatment of consumers affected by the suspension. TT has committed to automatically provide refunds to passengers who have been affected by the cancellation of flights in July.

For domestic flights booked to depart prior to Aug. 1, TT will provide a full refund, including ticket cost, taxes and any surcharges to all consumers and will refund these within 20 business days from the date the flights were canceled.

For flights in August, TT has agreed to allow consumers to cancel those flights without penalty. If passengers choose to cancel a booking, they will be required to advise the airline of their cancellation at any time until seven days after the resumption of services, which is subject to regulatory clearance by CASA.