TIGER AIRWAYS BOMBSHELL AS AIRCRAFT GROUNDED AND NEWS OF A MARCH 23 SHOW CLAUSE LEAKS!

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By TESTCustomwebLP TESTCustomwebLP April 21, 2011 13:45

TIGER AIRWAYS BOMBSHELL AS AIRCRAFT GROUNDED AND NEWS OF A MARCH 23 SHOW CLAUSE LEAKS!

Tiger Airways has cancelled fully-booked pre-Easter flights after the aviation regulator raised serious safety concerns. A Melbourne-Sydney flight due to leave at 11.50am today has been cancelled, while Melbourne-Brisbane service scheduled to leave at 6.15am today was cancelled earlier this morning leaving people trying to get away or home for Easter stranded. Both aircraft were booked to near capacity and alternate services will not be available until Saturday.

A Tiger spokeswoman apologised, saying only that Tiger’s decision had been made for “operational reasons”.

This development comes after the Civil Aviation Safety Authority threatened to ground Tiger over serious safety and maintenance breaches. It turns out that the CASA issued Tiger with a “show cause” notice on March 23, asking why it should not suspend its licence. The regulator wants urgent answers amid concerns that pilot training standards might not be up to scratch and there may have been short cuts on maintenance and other operations.

CASA, in a sternly worded letter to Tiger’s Melbourne management, raised concerns the cut-price carrier wasn’t following proper procedures to ensure the utmost safety of passengers.

The low-cost airline has triggered a price war with Qantas and Virgin forcing them to drop their domestic fares by 30%. Since its 2007 entry to Australia, Tiger has targeted the tourism market and undercut its rivals with a range of “special” fares including 1 cent flights.

Tiger has consistently ranked as the worst of the major airlines and had just a 72% “on time” record for last year. It now faces serious allegations over its commitment to maintenance and flight operations.

It is the first time in a decade that CASA has launched such action against a major airline.

The revelations mean Tiger’s management will almost certainly be dragged before a parliamentary inquiry into pilot training and airline safety. The Senate committee has heard serious allegations of cost-cutting by airlines, many of which are struggling to stay afloat.

It has about 100 flights a week in Australia but many customers have complained of lengthy delays and regular cancellations.

Well many of you will remember the last time that this happened down under, it was Ansett that was hit with a similar warning in 2001 – it failed two months latter.

You show me an Australian that will book a Tiger flight now knowing that the airline’s safety is in question. If Tiger does not fail on the back of this then it will, in any event, have to raise fares and start all over again to build customer confidence. In this market with fuel so high and having had an important holiday period grounded, I do not think that Tiger can survive, at least in Australia. Watch this space.

BRAZIL LOOKS TO CEMENT ITS PLACE AS THE NEW BOOM REGION OF THE GLOBE WHILE AA DOES THE US MARKET A FAVOUR

Brazil will more than double the amount of foreign capital investment in airlines allowed ahead of the 2014 FIFA World Cup and 2016 Olympics as it races to boost infrastructure.

Foreign investment caps are to be raised to 49% for domestic airlines, from the current 20% and the amendment is currently awaiting a vote which is expected to pass onto legislation with ease.

Domestic based airlines such as Gol and TAM have seen a surge in demand of 23.5% in the past year but they could be swamped as overseas carriers flood into Brazil over the next decade to service the huge sporting events being held there.

Meanwhile…American Airlines shows that the US market has no intention of letting gains slip

There was great news for the US airline sector yesterday. Not only did many airlines make another price increase stick and oil futures fell but just as we were all starting to worry about overcapacity American Airlines says that it plans to park about 10% of its MD-80 fleet this year and trim domestic capacity to stem losses due to fuel prices.

Texas-based American announced yesterday that it would ground at least 25 MD-80s, and gradually replace them with Boeing 737NGs.

American joins Delta and United airlines in cutting money-losing services in the US., while boosting flights on higher-margin overseas routes as 45% year on year fuel price increases squeeze margins.

At this point we could argue that low-cost carriers such as Southwest, JetBlue Airways and Virgin America will fill the void left by AA and others as they pull back. This is possible, but in many cases if the traffic is not there then neither are the margins. If oil prices fall or fares continue to increase then a chance for profit on the routes will lead to the likes of Southwest moving in.

The latest AA network tweaks will reduce American’s US service by 0.5% for the year, while boosting international capacity by 8.1% for the year.

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By TESTCustomwebLP TESTCustomwebLP April 21, 2011 13:45
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