COMM340: Managing Corporate Reputation G1 Prepared for Professor Michael Netzley

CASA Clips Tiger’s Wings

Chin Yau Seng, acting CEO of Tiger Airways Holdings Ltd. sat in his office of the Singapore headquarters looking over the financial figures for Q3 2011. A series of unsafe landings had resulted in Tiger Airways Australia being grounded by the Civil Aviation Safety Authority (CASA) in July. After five weeks of safety checks by CASA, the ban on Tiger’s flights was finally lifted in August. Even though he was glad that the Australian subsidiary had resumed its flights, the figures still showed a lack of public confidence. Come November, he would take over as group CEO and with the increased media scrutiny, all eyes were on him to lead Tiger in the right direction. The task was daunting, but he knew he had to act.

Company Profile: Tiger Airways HoldingsBased in Singapore, Tiger Airways Holdings Limited is a holding company that owns and operates the pan-Asian airline, Tiger Airways and Australia’s domestic carrier, Tiger Airways Australia. Formed in 2007, the holding company’s main objective is to help ease the management of the two subsidiaries in addition to any plans for future expansion, freeing up the airlines and enabling them to focus on operational issues instead.

Financially, Tiger Airways Holdings has been publicly listed on the Singapore Exchange (SGX) since February 2010. As of July 2011, the main shareholders possessing more than 5 per cent shares include Singapore Airlines Limited (32.8%) and Dahlia Investments Pte Ltd (7.37%).1

Tiger Airways Holdings has three other associated companies under its belt: South East Asian Airlines (32.5%)2, Mandala airlines (33%)3 and Thai Tiger Airways (39%).4

Based on the likes of successful budget carriers such as Europe’s Ryanair, Tiger Airways has similarly undertaken a business model centred on low costs and fares. This is achieved by scrutinising every single aspect of the business to remove non-essential costs without compromising passenger safety, security or punctuality.5

Tiger Airways focuses on establishing airlines in markets where their business model has exceptional potential to be sustainably profitable. With the belief that their business model is still highly underdeveloped throughout the world, Tiger Airways aims to enhance profitability by carefully managing capacity and creating a profitable portfolio of routes with consistently high passenger load factors throughout Asia and Australasia.

As of July 2011, Chin Yau Seng held the position of acting Chief Executive Officer (CEO) of Tiger Airways Holdings. He will take over as Group Chief Executive Officer (CEO) in November.

Tiger Airways SingaporeIncorporated in September 2003, Tiger Airways Singapore Pte Ltd (“Tiger Airways”) commenced its services as a low-cost airline on 25 March 2005. As a subsidiary of Tiger Airways Holdings and partially owned by Singapore Airlines, Tiger Airways is currently the

Prepared By:Denise TAN Su-Wen

Melissa LAW Shueh LiSiti Zuhairah Binte Mustafa KAMAL

CASA Clips Tiger’s Wings

largest low-cost airline operating out of Singapore, in terms of passenger figures. As of September 2011, Tiger Airways has a fleet of 16 Airbus A320-200, offering single-class economy seating for 180 passengers. With the company experiencing 75 per cent growth between 2005 and 2006, the airline is expected to grow further.

Tiger Airways AustraliaTiger Airways Australia Pty Ltd (“Tiger Airways Australia”) is a wholly owned subsidiary of Tiger Airways Holdings. The airline is based in Melbourne, Victoria, with its main base in Melbourne Airport and a secondary base in Adelaide Airport. Tiger Airways Australia commenced its services in the Australian domestic market on 23 November 2007 in Melbourne, and in Adelaide on 1 March 2009. Additional operational bases include a smaller “virtual base” opened in Sydney on 29 October 2009 and a third base at Melbourne’s Avalon airport in November 2010. As of September 2011, Tiger Airways had a fleet of 10 Airbus A320-200, offering single-class economy seating for 180 passengers.

In terms of profitability however, the situation has been bleak for Tiger Airways Australia, which has been unable to record profits since the beginning of its operations. An operating loss of $50.1 million for Tiger Airways Australia in FY2009 affected Tiger’s non-Australian operations, resulting in an overall loss of S$50,545,000.6,7

As of 1 July 2011, Crawford Rix held the post of CEO of Tiger Airways Australia.

Tiger’s Leading Men (See Exhibit 1 for detailed profiles)Chin Yau Seng Formerly the CEO of SilkAir with more than 15 years service in the Singapore Airlines Group, Chin Yau Seng is currently the acting CEO in the Board of Tiger Airways Holdings Limited. He holds a Master of Science degree in Operational Research and a Bachelor of Science (Hons) degree in Accounting and Finance, both from The London School of Economics and Political Science.8

Tony Davis Davis holds a Postgraduate Diploma in Business Administration from Lancaster University and is a Fellow of the Society for Encouragement of Arts, Manufacturing and Communications, a Member of the Air League and a Member of the Royal Aeronautical Society. He has 18 years of airlines experience, including a position as founding Managing Director of Britain’s thriving low fares carrier, bmibaby. During his service from January 2002 to December 2004, he was further exposed to the low fares airline sector and developed significant experience and expertise in airline strategy, operations, marketing, government and industry affairs.9

Davis was appointed as President and Chief Executive Officer (CEO) of Tiger Airways Australia’s parent company, Tiger Airways Holdings10, in January 2005 and became one of the pioneers in Southeast Asia’s budding budget carrier market.

Andrew DavidAndrew David was formerly the Chief Operating Officer (COO) at Virgin Blue, Australia’s second largest airline. Prior to joining Virgin in 2005, David took up various senior management roles at Air New Zealand, including Head of Strategy and Planning as well as Chief Information Officer. He took over Tony Davis’ position in Tiger Airways Australia as CEO on 17 October 2011, the third CEO Tiger Australia has had in a span of 18 months.10

Crawford RixCrawford Rix was appointed as Tiger Airways Australia’s CEO in 2010. He was previously Managing Director of bmibaby for four years, from 2007 to 2010. As a 30-year veteran in the

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aviation industry, Rix formerly held positions at Dan Air, British Midland, bmi regional and bmibaby.

The Operating Environment in AustraliaCivil Aviation Safety Authority The Civil Aviation Safety Authority (“CASA”) was established on 6 July 1995 as the National Aviation Authority (NAA) of Australia, an independent statutory authority responsible for the regulation of civil aviation. With a vision focused on providing “Safe skies for all”, CASA primarily functions to govern the safety regulations of civil air operations in Australia and the operation of Australian aircrafts overseas. Other commitments include licensing pilots, ground crew, aircraft and airfield operators; providing comprehensive safety education and training programmes, cooperating with the Australian Transport Safety Bureau and administrating certain features of Part IVA of the Civil Aviation (Carrier’s Liability) Act 1959.11

CASA operates alongside Airservices Australia and the Department of Infrastructure, Transport, Regional Development and Local Government, with each constituent having separate and distinct functions but working together as a tripartite body to maintain the common goal of providing safe aviation in Australia.

Environmental FactorsWith fuel expenses comprising 27 per cent of an airline’s total direct operating costs12 and the airline’s sensitivity to spikes in oil prices, the strength of oil prices remains the main grouse of the company. As of June 2011, the company had hedged approximately 30 per cent of its fuel requirements, and estimated that a US$5 rise in jet fuel prices could spur a 15-28 per cent erosion of the company’s profits.13

In addition, Tiger Airways Australia experienced a $7.1 million loss for the financial year ended 31 March 2011, which was predominantly blamed on the Queensland floods and cyclone. The floods and weather disruptions reportedly cost the company an estimated $15m of profitability, contributing to the disappointing performance that came in contrast to the news of the company attaining breakeven the year before. In addition, multiple volcanic ash clouds from the eruption of the Cordaacón Caulle volcano in Southern Chile on 4 June 2011

saw carriers like Qantas, Jetstar, Virgin and Tiger cancelling flights due to safety concerns.

Australia’s Competitive Aviation IndustryIncreasing popularity of budget carriers has spurned a competitive operating environment. The aviation industry is experiencing changing demographics in travel, with more and more consumers demanding cheaper airlines and valuing cost over comfort, particularly for short-haul flights. An article from The Australian in February 2011 pointed out the growing price-consciousness of Australians, with 60 per cent of travellers choosing price rather than reputation as the main influencer in their decision to pick an airline.14 Competition has been rising in the budget aviation industry in Australia, the likes of which Jetstar Airways and Virgin Australia emerge. With price wars and uncooperative industry counterparts, Tiger has been thrown into a hostile operating environment.

Jetstar, in particular, proved to be an aggressive competitor, proactively reacting to the price initiatives presented by Tiger Airways Australia. Exhibit 2 illustrates Jetstar’s reactions to Tiger’s airfare charges.

On a different note, Virgin Australia did not show much concern over the new airline in the industry, and did not respond to the airline’s entry in any significant way. Despite initial considerations concerning the establishment of a low-cost carrier to directly compete with Tiger Airways, Virgin Australia decided to shift tactics by instead choosing to focus their

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CASA Clips Tiger’s Wings

funds on V Australia, its new trans-Pacific carrier, and also by introducing a Premium Economy service to capture a greater share of the business travel market.

Tiger Airways’ Souring Customer RelationsFor many months, Tiger Airways constantly received customer complaints regarding frequent cancellation and rescheduling of flights, failure to give proper notice of changes and a seemingly non-functioning telephone hotline.15

Till the end of June, Tiger had the highest rate of flight delays and cancelled flights in Australia. At one point in 2011, it reached more than six per cent – one of the all-time highest rates globally.16 According to statistics from the Australian government for the month of May, Tiger cancelled 3.5 per cent of their flights, compared with Qantas at 1.1 per cent, Virgin at 1.2 per cent and Jetstar at 0.8 per cent. In the same month, Tiger’s rate of on-time flights was only about 74 per cent, compared to Qantas’ 87 per cent and Jetstar’s 81 per cent.17

Tiger’s Customer Communications Manager, Vanessa Regan, explained that the airline was working through its problems.

“One hurdle, for example, is dealing with customers that don’t understand how airlines work, that delays and cancellations can be experienced on other airlines.”

Customer satisfaction in Australia was so negative that Tiger had a television program on Channel 7 called Airways showing all of its problems. An interview with Regan revealed that Tiger didn’t think much of the program when she stated, “at least everyone’s talking about us”.18

Besides their poor service, consumers were enraged with Tiger’s response to criticisms. According to Travel Agency World, Facebook fans were reportedly banned and their comments deleted after they posted negative comments in response to Tiger’s post ‘Do you love us?’

Early Warning SignalsAmidst customer negativity, Australia’s industry regulators also expressed their dissent with Tiger’s operations. In March 2011, CASA issued Tiger with a show cause notice over aircraft maintenance, pilot proficiency and overall competency of the airline’s safety management system. CASA subsequently imposed conditions on Tiger’s air operator certificate, demanding that Tiger improve pilot proficiency and training, fatigue management, maintenance control and ensure the employment of appropriately qualified people for management and operational positions.19

To top things off, Tony Davis sold one million shares in June, which was about a quarter of his shares in the company, at below the initial public offering price of $1.50.15 While Davis' decision to sell was a personal issue, it raised questions in the market regarding Tiger’s long-term prospects.20

The Final StrawWhen a flight landing in Avalon Airport flew at an unsafe altitude on 30 June, it was the final straw for CASA. This was not the first time that Tiger Airways Australia failed to heed the show cause notice previously issued in March. Another flight on 7 June also flew too low as it was landing at Melbourne Airport. Reports claim that the same pilot was in control of both flights.21

At 11pm on 1 July 2011, CASA immediately acted to ground all domestic services operated by Tiger Airways Australia. A CASA representative explained that “permitting the airline to

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continue to fly poses a serious and imminent risk to air safety”22 and while they acknowledged that grounding the entire airline would greatly inconvenience passengers during the school holidays, passenger safety must come first. Tiger’s failure to take CASA’s warning seriously resulted in a long list of safety concerns to work on before flights could resume.23

CASA spokesman Mr. Peter Gibson commented, “All on top of each other, (they) add up to a position where the Civil Aviation Safety Authority has lost confidence in Tiger's ability to manage safety appropriately. It's not so much the mistakes in themselves, the individual mistakes of the pilots, it's the pattern you're seeing of safety issues arising over and over again within the airline.”24

Tiger Airways’ Response By 3pm the next day, Tiger Airways Australia released a statement to the media to inform the public of CASA’s decision to ground the airline. In its statement, Tiger apologised to the public and offered affected passengers a full refund or credit for deferred travel.25 Tiger also assured the public that it would cooperate with CASA and work on the reported safety concerns to get the airline back in the skies as soon as possible. Exhibit 3 shows Tiger’s media statement.

Despite their quick response, not all stakeholders were satisfied with the way Tiger handled the situation. Chairman of the Australian Competition and Consumer Association (ACCC), Graeme Samuel, said “I’d have to say that the reaction of Tiger in the period from Monday morning through to Tuesday night was far from satisfactory at all, well the reaction was nothing, no response.”26 He went on the say that there was a 48-hour lapse where Tiger did not provide advice for customers regarding ticket sales and the company only acted to suspend ticket sales late on 5 July after warnings from ACCC.27

The same pattern was seen on their social networking sites. For four days, Tiger allowed its Facebook and Twitter pages to be flooded with unsettled customer complaints and queries. The airline decided to attend to its social media feeds only after 72 hours of CASA’s intervention.28

On 6 July, Tiger Airways Holdings announced a series of management changes. Tony Davis, CEO of Tiger Airways Holdings, was appointed as CEO of Tiger Airways Australia following the departure of Crawford Rix, while remaining a director of Tiger Airways Holdings. Chin Yau Seng, former Divisional Vice President Cabin Crew Operations of Singapore Airlines, was appointed as Executive Director of Tiger Airways Holdings. 29

Despite on-going investigations on the cause of the grounding, Tiger Airways remained tight-lipped on the reasons behind their safety issues and the possible grounding extension. During Tiger's first quarter earnings call, Chin claimed that Tiger had "made good progress with CASA".30

Tiger’s Open Letter and Retraction On 10 August, Tiger Airways released a notice to its e-mail subscribers that sparked the attention of its competitors and the Australia Competition and Consumer Commission (ACCC). The notice stated, ‘Since we haven’t been flying, our competitors have raised their fares by more than 30%’. This statement was reiterated by Davis who said, “Customers can see what happens when Tiger's not around. As soon as we stopped flying, their [competitors'] fares went up, I think, by 32 per cent. That's outrageous."31

The statement prompted Tiger’s competitors to defend themselves, with Tiger’s main rival, Jetstar, resuming hostilities over which airline could offer consistently low fares to its

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CASA Clips Tiger’s Wings

customers. A Jetstar spokesman disputed Tiger’s claim, saying, “We certainly have not raised fares, we've served the public well by giving all those passengers Tiger couldn't lift, a safe, reliable and punctual service.”32 Despite the apparent rise in fare prices following Tiger’s grounding, Qantas proceeded to file a formal complaint to the ACCC regarding the company’s marketing e-mail.

In response, the ACCC established that Tiger Airways did not have a proper basis for making that statement and may have contravened the Competition and Consumer Act 2010 (CCA) by making a false or misleading representation.33 Although Tiger attributed the 30 per cent figure to a report by Goldman Sachs, the ACCC stood on Qantas’ side. “Businesses must ensure that any representations they make about a competitor’s prices are accurate”, ACCC chairman Rod Sims said.

Two days later, Tiger issued a corrective notice to its e-mail subscribers, retracting its statement and acknowledging that it may have contravened the CCA. Exhibits 4 and 5 show Tiger’s full statement and corrective notice respectively.

CASA Extends Tiger’s SuspensionAs a rule of thumb, CASA can only ground an airline for five working days, and must approach the federal court if it wants to extend the grounding. On 5 July 2011, having found further deficiencies, CASA remained dissatisfied with Tiger's resubmitted documentation on issues such as pilot safety and aircraft operations. Due to safety requirements being of utmost priority in the airline industry, CASA filed an application to the Federal Court causing Tiger Airways Australia to be further suspended till 1 August 2011. The next court hearing was scheduled to be on 22 July 2011.

Despite the fact that CASA issued Tiger Airways Australia a set of formal conditions that the airline had to comply with, the airline failed to produce reasonable safety standards. As a result, the court hearing was adjourned five times as both parties did not see the significance of having a hearing while investigations regarding the suspensions were underway. 34 The hearing was finally held on 5 August 2011, with CASA extending the suspension to 11 August 2011. By that time, it had cost Tiger Airways a month’s worth of flight operations.

Tiger Back In The SkiesAfter five gruelling weeks of grounding and investigations, CASA finally lifted the ban on Tiger Airways Australia on 10 August 2011. Several safety conditions were imposed on the budget airline including only allowing Tiger to fly 18 instead of 60 flights per day. Other new regulations included pilot training and proficiency, a change in pilot scheduling and fatigue management, as well as improved operation manuals. In addition, from 10 aircrafts flying out of three hubs, the airline was down to eight planes and just a single base in Melbourne.35

With the green light from CASA, Tiger Airways Australia recommenced ticket sales and implemented a gradual resumption of domestic services from 12 August 2011. The airline resumed with a simplified flight programme focused on flying popular routes. Tony Davis, Tiger Airways Australia’s CEO, together with Tiger’s newly appointed Safety Advisor, Captain Chris Manningi was on board the first flight out to build the confidence of passengers on board.

Effects of GroundingTiger Airways Customers and Public A total of 35,000 travellers were affected by the grounding of the airlines in Australia. Although they were given refunds and offered discounted fares on other airlines, there was a

i An Australian veteran pilot with more than 40 years of experience. He was also the president of the Australian and International Pilots Association and manager of flight operations at Qantas.

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CASA Clips Tiger’s Wings

lack of confidence in Tiger Airways Australia due to ACCC’s criticisms. Speculations were made regarding the airline’s failure to act in the best interest of their customers.36

EmployeesMore than 100 Tiger employees were affected by Tiger’s grounding. Those affected by the closure of its Adelaide Airport and the temporary suspension of its Avalon (Melbourne) Airport were offered redeployment to the Melbourne Airport (Tullamarine) base. Those who did not take up the offer were promised redundancy packages to be paid in due course.

However, according to the report by the Australian Broadcasting Corporation, 10 ex-employees were allegedly assured combined payments of up to A$40,000 (S$50,077) by 1 October but payments were not made as promised by the organization. In addition, Tiger Airways Australia was under media scrutiny for allegations that 230 casual workers did not receive their income during the suspension of its flights.

This unhappiness mounted to a point where employees decided to take legal action against Tiger. One of these employees said, “Unfortunately, we have been left with no choice but to contact TGBii and instruct them to act on behalf of all of us. All we are seeking is what we are entitled to.”37

Economic Impact on Tiger Airways HoldingsTiger Airways’ shares plummeted on the Singapore Exchange after news of the grounding broke out, plunging 16 per cent to close at S$1.38 Investors sold their shares in a panic, despite the airline stating it remained committed to the Australian market in the long term. At least five analysts – from CIMB, Citi, CLSA, Credit Suisse and Phillip Securities slashed their ratings to sell after the announcement was made. More worryingly, from July to October, shares continued spiralling downwards, closing at an all time low of $0.66. Exhibit 6 shows Tiger’s stock quote from December 2010. The grounding was estimated to cost Tiger Airways Australia S$2 million a week. As a result of increasing fuel costs, lower revenue and flight disruptions due to the Chilean volcano ash cloud, Tiger suffered heavy first quarter losses of S$23.2 million (US$19.02 million) in the three months leading up to 30 June 2011. The airline is hence expected to record a net loss for the financial year.39

While addressing shareholder concerns about Tiger pulling out of Australia after such a major setback, Chin assured them that there was "money to be made" in the domestic market and they were "nowhere close to that tipping point".40

Tiger’s CompetitorsAirlines such as Qantas, Virgin Australia and Jetstar benefited from the grounding by offering affected Tiger Airways passengers extra seats at discounted prices. Shares of Qantas and Virgin Australia rose 6.5 per cent to AUD$1.97 and 10.5 per cent to 31.5 Australian cents respectively, following Tiger's woes.41

Australia’s TourismAustralian regional tourism operators were concerned that Australia’s grounding would have a backlash effect on the tourism sector as many of Tiger's customers were families on a budget or people who had saved for a long time for a holiday. Tourism and Transport Forum CEO John Lee claimed that they could not afford to lose this segment of the market as it fuelled their tourism industry.42 Tiger’s possible exit from Australia would put the Australian market at a disadvantage with lower airline capacity at cheaper prices.Chin’s Dilemma

ii Tindall Gask Bentley, a leading Adelaide law firm

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CASA Clips Tiger’s Wings

It has been close to a month since the resumption of Tiger Airways Australia’s domestic flights but operating statistics for the month of August have been bleak. With a significant reduction in flight bookings and CASA’s control over their flight schedules, it was clear that Tiger's biggest challenge was regaining public confidence and trust. “Once they [the consumers] have been frightened, I suspect it’s going to be really hard to turn them around”, said Melbourne Business School Associate Professor of Business Strategy, Doug Dow.43

Being next in line to take over the reins from Davis, Chin knew he had to act in order to mitigate the losses for the financial year. With shares at an all time low of 66 cents, it was imperative that he come up with a strategy. The only question was: How?

Discussion Questions

1. What is the main problem at the end of this case?2. Who are the key stakeholders involved? How has the grounding affected their

relationship with Tiger? Be specific.3. What actions should Tiger take to regain the trust of its stakeholders?

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CASA Clips Tiger’s Wings

Exhibit 1The individuals who gave Tiger its stripes

Tony Davis2005-2011 President and Chief Executive Officer of Tiger Airways,

Executive Director of Tiger Group

2002-2004 Founding Managing Director and development team of bmibaby since its inaugural flight in 2002

1999-2001 Director of Corporate Affairs in British Midland Airways

1997-1999 General Manager, Industry Affairs and Pricing in British Midland Airways

1994-1997 Worked in Bahrain Gulf Air Company as Manager, Interline Development, Pricing and Industry Affairs

1986-1994 Worked in various management capacities in Marketing and Strategic Alliances for British Airways. Stationed in London and New York.

Chin Yau Seng2010-2011 Executive Director of Tiger Airways Holdings Ltd. Will take

up position as Chief Executive of the Company effective 1 November 2011

Divisional Vice-President (Cabin Crew Operations) for Singapore Airlines

2007-2010 Chief Executive of SilkAir

Non-executive Director of Tradewind Tours & Travel Pte. Ltd.

Since 1995 Held various appointments in Singapore Airlines including Vice-President company planning & fuel, General Manager Greece, Regional Marketing Manager Europe and Regional Marketing Manager North Asia

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CASA Clips Tiger’s Wings

Exhibit 2 Competition ensues as Jetstar meets the new kid on the block, Tiger Airways

Tiger Airways Australia (“Tiger”) Jetstar Airways (“Jetstar”)

Jetstar announced that it would “double the difference of any competitor’s fares that was cheaper than (their own) fares”, followed by a bonus system aimed at retaining its existing customers.

Release of Tiger’s first route from Melbourne-Darwin at A$79.99

Criticized Tiger Airways’ fare price due to the company’s prior quote regarding offering “single digit one-way fares” when it began service. Immediately undercut Tiger’s fare by offering A$79 fares for the same route over the same period

Release of Tiger’s second route from Melbourne-Gold Coast at A$49.95

Undercut Tiger’s fare by offering A$39 fares for the same route over the same period

Announced that Melbourne-Launceston flights would be priced at A$39.95

Undercut Tiger’s fare by offering A$29 fares over the same period, less a holiday blackout

Additional Reactions from Jetstar

On 21 November 2007, days before Tiger was launched in Australia, Jetstar made available 5,000 seats at a price of 5 cents (inclusive of taxes) on seven domestic routes. This cost the airline $25.00 per seat but when questioned about the rationale behind it, Jetstar denied that their actions had any relation to Tiger’s launch in Australia.

Tiger publicly criticized Qantas on 23 November 2007 for refusing to provide ground-handling services to the airline in Alice Springs at any price and despite the fact that Tiger was willing to rearrange its planned flight schedule. This action ultimately forced Tiger to delay its launch in the city till 1 March 2008, a period of three months. Said Qantas’ executive general manager John Borghetti: “Assisting competitors is not part of my job description”44. This statement was countered by Tiger Airways Australia’s CEO, Tony Davis, who reminded Qantas that Singapore Airlines, Tiger’s parent company, routinely provided ground services at Singapore Changi Airport for both Qantas and Jetstar, and it was not unreasonable for Tiger to expect the same level of reciprocity at Alice Springs.

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Exhibit 3Tiger’s Media Statement, 2 July 2011

MEDIA UPDATE STATEMENT FROM TIGER AIRWAYS AUSTRALIA

15:00 HRS – 2 JULY

Following the Civil Aviation Safety Authority of Australia’s (CASA) instruction to suspend Tiger Airways Australia’s domestic services until next Saturday (9th July), the airline’s immediate focus has been on reaching passengers whose immediate travel plans have been disrupted as a result, as well as ongoing cooperation with CASA.

Tiger Airways is offering these passengers its sincere apologies and will continue to do all that we can to minimize future disruption. Those who are affected will be offered a full refund or credit for deferred travel. We urge customers with bookings within Australia between now and 6 am on Saturday 9th July to not travel to the airport.

Tiger Airways’ services to and from Singapore are not affected and will continue to operate normally.

Tiger Airways continues to cooperate fully with the industry regulator and we wish to reassure the Australian public that safety has and will underpin our operations at all times.

Having mitigated immediate passenger disruption to the best of our ability, Tiger Airways’ next priority is working with the safety regulator to achieve a satisfactory outcome to this investigation at the earliest opportunity, as we did with the recent Show Cause Notice. In this case Tiger Airways has taken steps to comply with the conditions required by CASA as a result of this process.

Tiger Airways has already taken steps internally to address the specific issues as well as wider safety concerns CASA has raised. We are committed to resolving these quickly and resuming our services as soon as possible. We will continue providing regular updates via our website (www.tigerairways.com) as well as through the media.

Passengers who have booked travel with Tiger this week are again reminded to not turn up to the airport.

Virgin Australia has also offered to assist effected Tiger Airways’ travelers where possible over the coming week. Please see the following link for more information.http://www.virginaustralia.com/servicedisruption/index.htm

NOTE TO MEDIA – THE NEXT TIGER AIRWAYS MEDIA UPDATE WILL BE PROVIDED AT 15:00 HRS AEST ON SUNDAY 3RD JULY. ALL FURTHER RELATED QUERIES AT THIS TIME SHOULD BE DIRECTED TO CASA.

Please note: Tiger Airways' call centre is experiencing a high volume of calls at this time but the airline has added extra agents to help field the volume of calls.

Passengers are advised to monitor the website as it will be updated regularly throughout the week with further updates.

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Exhibit 4Tiger’s letter to its e-mail subscribers, 10 August 2011

Source: http://www.centreforaviation.com/blogs/aviation-blog/australian-air-fares-continue-to-climb-post-tiger-grounding-60647

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Exhibit 5 Tiger’s corrective notice, 12 August 2011

Source: http://www.centreforaviation.com/blogs/aviation-blog/australian-air-fares-continue-to-climb-post-tiger-grounding-60647

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Exhibit 6Tiger’s stock quote (Dec 2010 – Oct 2011)

Source: Yahoo! Finance

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Endnotes

15

1 Tiger Airways Holdings. Retrieved August 15, 2011, from Tiger Airways: http://www.tigerairways.com/sg/en/about_us.php

2 Thomson Reuters. (2011, February 24). Singapore’s Tiger Air buys 32.5% stake in Philippines SEAIR. The Edge Singapore. Retrieved from http://www.theedgesingapore.com/component/content/article/26549.html

3 CAPA. (2011, September 26). Tiger Airways purchases 33% stake in Mandala Airlines. Centre for Aviation. Retrieved from http://www.centreforaviation.com/news/tiger-airways-purchases-33-stake-in-mandala-airlines-121396

4 AsiaOne. (2010, November 21). Thai Tiger launch delayed by 2 months. AsiaOne. Retrieved from http://www.asiaone.com/print/Business/News/Story/A1Story20101121-248322.html

5 Tiger Airways Holdings. Retrieved August 15, 2011, from Tiger Airways http://www.tigerairways.com/au/en/about_us.php

6 News.com.au. (2010, February 26). Tiger Airways moves into profit. News.com.au. Retrieved from http://www.news.com.au/business/breaking-news/tiger-airways-moves-into-profit/story-e6frfkur-1225834661754

7 Tiger Airways Holdings (2010). Annual Report. Retrieved August 15, 2011, from Tiger Airways http://www.tigerairways.com/news/Annual_Report_2010.pdf

8 Reuters. Retrieved August 15, 2011, from Reuters http://in.reuters.com/finance/stocks/officerProfile?symbol=TAHL.SI&officerId=1605285

9 UATP. Retrieved August 15, 2011 from UATP http://www.uatp.com/distribution2005/bios/TonyDavis.pdf

10 O’Sullivan, M. (2011, September 12). Ex-Virgin exec gets top job at Tiger. The Sydney Morning Herald. Retrieved from http://www.smh.com.au/business/exvirgin-exec-gets-top-job-at-tiger-20110912-1k54m.html

11 Civil Aviation Safety Authority. Retrieved August 15, 2011 from CASA http://www.casa.gov.au/scripts/nc.dll?WCMS:STANDARD::pc=PC_91621

12 SH&E Ltd. (2003). Airline Operating Costs [Powerpoint Slides]. Retrieved from http://www.soton.ac.uk/~jps7/Aircraft%20Design%20Resources/Cost%20data/Airline%20operating%20costs.pdf

13 CIMB Research. (2011, March 28). Tiger Airways of high oil prices and poor Australian demand. Retrieved from http://kfc1973-stock.blogspot.com/2011/03/tiger-airways-of-high-oil-prices-and.html

14 Lane, J. (2011, August 17). Tiger Airways bounces back in Australia. Asian Correspondent. Retrieved from http://asiancorrespondent.com/62665/tiger-airways-australia-gathering-steam/

15 Kaur, K. (2011, July 11). Tiger Airways’ bumpy flight. The Straits Times. Retrieved from www.asianewsnet.net/home/news.php?id=19882

16 Dorman, C. (2011, August 22). Does Tiger have a future in Australia? The Age. Retrieved from http://www.theage.com.au/travel/blogs/travellers-check/does-tiger-have-a-future-in-australia-20110822-1j5qm.html#ixzz1czBEfDLU

17 Fraser, Jane E. (2011, August 21).Tiger faces fight to claw back confidence. The Sydney Morning Herald. Retrieved from http://www.smh.com.au/travel/tiger-faces-fight-to-claw-back-confidence-20110819-1j23x.html 18 Merhab, B. (2010, May 3). Tiger Airways: not so vicious after all. The Sydney Morning Herald. Retrieved from http://www.smh.com.au/travel/holiday-type/budget/tiger-airways-not-so-vicious-after-all-20100331-rdv7.html

19 AAP General News Wire. (2011, July 2). CASA says it lost confidence in Tiger, AAP General News Wire. Retrieved from http://au.finance.yahoo.com/news/CASA-says-lost-confidence-aap-159843392.html?x=0

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CORR - AUST WATCHDOG CRITICISES TIGER AIRWAYS TICKET SALE HALTAnonymous. Asia Pulse [Rhodes] 06 July 2011.

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Australian Tourism Body Warns On Tiger Airways Grounding ImpactsAnonymous. Asia Pulse [Rhodes] 05 July 2011. Retrieved from http://search.proquest.com/docview/874617292?accountid=28662

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