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TigerAir Mandala to Close July 1, 2014

Indonesian Low-Cost Tigerair Mandala Closes Blaming High Operating Costs and Depreciating Rupiah

(6/21/2014) Indonesian Air Carrier Tigerair Mandala has announced that they will cease operations effective July 1, 2014, blaming high operating costs and the depreciation of the Indonesian Rupiah as major contributing factor in their closure.

Quoted by the State News Agency Antara, the chief commissioner of PT Mandala Airlines, Jusman Syafi Djamal, issued a written statement on Wednesday, June 18, 2104, saying, “Excess capacity of the airline in comparison with the demand for seats and the weak trading value of the Rupiah that has declined 20% since early 2013 have significantly increased the operating costs of Mandala.”

The Indonesian carrier has consistently sustained losses since it began operating in April 2012.

A difficult operating environment for low-cost airlines and Mandala’s growing losses have dissuaded the airline’s shareholders from providing continuing economic support.

“We have tried to find a number of solutions to allow continued operations, including discussions with new strategic partners and new investors,” explained Jusman.

He went on to say that the airline and its shareholders are in the midst of discussing steps that will permit the settlement of financial obligations of the airline to its employees and creditors

On a more personal level, Jusman said: “We deeply regret having to take this decision and apologize to our employees and their families, our passengers, and all our partners for the inconvenience this decision has created. The Commissioners also issues its thanks to passengers, the government, airport officials and the purveyors of other services for their support in the past.”

Tigerair Mandala will operate its last flight in the form of RI 545 flying from Hong Kong to Denpasar on July 1, 2014 that will depart Hong Kong at 2:35 am. There will be no other flights operated by the airline on that date or thereafter.

Passengers holding tickets on Tigerair Mandala for flights that will no longer operate should visit the Tigerair website or telephone ++62-(0) 21-2939-6688 that will continue to be staffed until July 31, 2014.

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