What Does Tigerair’s Recent Public Relations Blunder Mean for the Company?

worried man

Tiger Airways Holdings (SGX: J7X), commonly known as Tigerair, is in the news again and it’s not about something good.

The low-cost carrier had recently announced that it will cease operations for its associate company, Tigerair Mandala, from 1 July 2014 onwards. The announcement came suddenly and would affect close to 70,000 passengers who have pre-booked their flights..

Tigerair’s public relations blunder

Accompanying the news of Tigerair Mandala’s closure were rumours circulating on social media platforms about the way Tigerair had bungled the closure of its associate in the way it handled those affected passengers.

Personally, I thought nothing of it until I came across Tigerair’s own announcement about Tigerair Mandala. In the words of the company (emphasis mine):

As a gesture of goodwill, the Tigerair Group will assist all affected customers with either a flight transfer to a TR flight if seats are available, or a refund for tickets booked for travel on 1 July or thereafter. Tigerair has no legal obligation or responsibility to do so. All legal obligations and responsibilities still rest with Mandala.”

I can’t understand those actions. It’s hard to imagine Tigerair actually cultivating the customer goodwill it badly needs right now by telling already-disgruntled passengers that it has “no legal obligation or responsibility” to resolve their travel issues and that any help rendered is only “a gesture of goodwill” by the company.

I think Tigerair has failed to realise that those 70,000 customers who were affected might need aftersales services that goes above and beyond the normal line of duty to convince them that it is worth to fly with Tigerair again after this incident.

With the company struggling to make any profit (it has clocked cumulative losses of S$373 million in the three years ended 31 March 2014), it really cannot afford to lose any customer goodwill.

Some unsolicited advice

Although I’m no PR expert,  I still want to share my two-cents worth of unsolicited advice: Maybe the company should have just apologised and did its best to handle customers’ complaints.

When you’re flying planes 36,000 feet in the air, it’s perhaps easy to forget that air travel still belongs to the service industry. With Tigerair being in that industry, providing top-notch customer service that leaves a lasting impression is perhaps just as important as being a low cost provider of air travel. The sooner Tigerair realises this, the easier it might be for the company to turn its business around.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.