THE Victorian Government helped cover half the set-up costs of the Singapore Government-backed Tiger Airways Australia in 2007, as part of its efforts to lure the low-cost carrier to Melbourne's Tullamarine airport.
Opening the lid on the two years of secrecy over what sweeteners Tiger received to establish its Australian base in Melbourne, the airline's belated release of its first set of full-year financial accounts show it was paid $3.9 million in government grants. These grants made up half the $7.9 million "pre-operating" expenses Tiger incurred before starting services in November 2007.
Tiger declined to say whether it has received additional incentives from the privately owned Melbourne Airport.
The Singapore airline also declined to comment on speculation it has received a hand-out from the South Australian Government in relation to the planned establishment of its second Australian base in Adelaide next month.
"We're not at liberty to talk about our arrangements with airports or particular governments," said Tiger spokesman Matt Hobbs. South Australia has been desperate for an airline to base itself there since the opening of Adelaide Airport's $260 million terminal in 2005.
State Government hand-outs to airlines are nothing new. It is believed Virgin Blue received attractive incentives from the Queensland Government to base itself in Brisbane in 2000, and more recently from the NSW Government to establish its long-haul subsidiary V Australia in Sydney.
The Victorian Department of Innovation, Industry and Regional Development's annual report also lists Jetstar and the Leighton-owned maintenance company John Holland Aviation Services as recipients of industry grants.
Despite its hand-out, Tiger's accounts for the year to March 31, 2008, show the airline had lost $20 million four months after its launch. Despite market conditions deteriorating since then, the airline has rejected growing worries in the travel and aviation industry that it is in financial trouble.
Mr Hobbs explained a recent scaling back of Tiger services was due to seasonal factors."We do not have as many flights in February as we do in January," he said.
As for reports of multiple Tiger jets being kept in hangars during the day, Mr Hobbs said the airline usually scheduled more of its planes for maintenance during quiet periods. "We try to do a fair bit of it in February
(Bull****
)," he said.
Mr Hobbs said Tiger would press ahead with the launch of its Adelaide base next month, from where it will base two of its six Australian A320s. From Adelaide, Tiger plans to launch services to Perth, the Gold Coast, Alice Springs, Hobart and Canberra. Tiger has yet to say when it hopes to start flights to Sydney or Brisbane.
Tiger is 49 per cent owned by Singapore Airlines, whose largest shareholder is the Singapore Government's investment vehicle Temasek Holdings. Temasek also has an 11 per cent direct stake in Tiger.
