TEMPO.CO, Jakarta - Tigerair Mandala airlines has decided to stop operating starting on July 1, 2014, and refused to provide compensation for passengers that have purchased tickets.

The decision was made due to the slowing markets and increasing operational costs triggered by weakening Rupiah.

Before it decided to stop the operation, Jusman Syafii Djamal, Tigerair Mandala board commissioner chairman, said that the airline had tried to cut costs by closing dozens of routes in February this year.

However, the shareholders were unwilling to disburse more capital. “The board reviewed Mandala’s position and decided that it does not have enough resources to continue operating,” he said.

In response to the ticket issue, Pauline Suharno, Chief of Ticketing Division of the Indonesian Airline Ticket Sales Association, said that there will be no refunds. "Usually there are no refunds based on past events. For example, when Batavia and Adam Air stopped operating, they do not give out refunds," she said.

She then explained the events when Batavia Air stopped operating a while ago. Travel agents have been in and out of courtrooms to deal with the refunds of pre-purchased tickets. "But the court's decision said that the tickets purchased have become airline assets," she said.

Once operations have stopped, Batavia then pays its employees, taxes and debts to vendors such as Pertamina, several banks, and ticket agents.

ALI HIDAYAT