11-Jul-2011 10:16 AM

Tiger to face huge costs if it drops Australia

Tiger Airways would face large costs should it quit the Australian domestic market following its forced grounding, due to complicated long-term aircraft lease contracts (Sydney Morning Herald, 11-Jul-2011). The majority of Tiger Airways Australia’s aircraft is believed to be cross-collateralised, so if it pulls out of the Australian market its Singaporean parent, Tiger Airways Holdings, will be liable for breaching lease agreements. RBS Aviation Capital and CIT Aerospace have the largest exposure to Tiger’s Australian fleet.