Tiger Airlines has won a major financial concession from the South Australian state government, after closing its Adelaide base last August and ending services to the city.
The move breached a commercial agreement with the SA government, under which Tiger received a $2.25 million incentive grant in 2009 to establish its SA base.
After its grounding by CASA last year, Tiger closed the base and did not resume any Adelaide services when it returned to the air.
The government began action to recoup the funds but has settled for a “reasonable” $1.4 million repayment by Tiger, leaving an $850,000 shortfall.
The Singapore-owned airline’s payout will be reduced by another settlement – payment by the government of a $500,000 GST incentive from the SA Tourism Commission incentive, which had been withheld.
The state opposition attacked the government’s agreement with Tiger, which despite assurances had put taxpayers “absolutely” at risk, Opposition Leader Isobel Redmond said.
Previously, State Trade Minister Tom Koutsantonis said: “No taxpayers’ money from the $2.25 million offered will be lost.”
Tiger said the settlement paved the way for a resumption of services to Adelaide – but it was unable to make any commitment to timing.
“We are talking to a number of tourism and airport partners around Australia, including Adelaide, about our future growth plans, however we don’t have anything specific to confirm at this time in this regard,” Tiger Airways Australia chief executive Andrew David said.
Reporting by Chris Milne