Aviation regulators grounded budget carrier Tiger Airways Australia Saturday because it posed a "serious and imminent risk to air safety", throwing the travel plans of thousands of people into chaos.
Australia's Civil Aviation Safety Authority (CASA) said Tiger's domestic services had been suspended with immediate effect following a series of incidents that had raised questions about its airworthiness.
The first grounding of an entire airline in Australian aviation history, the ban is for an initial five working days, after which officials can apply for a court-enforced extension to allow for further safety investigations.
A subsidiary of Singapore's Tiger Airways, Tiger Australia operates about 60 domestic flights a day, moving up to 9,000 passengers.
Transport Minister Anthony Albanese said about 35,000 people would be affected by the week-long ban, which he described as an "extremely regrettable" but necessary step.
CASA said it was considering applying for an extension and warned that Tiger's licence to fly was at stake, though that was "not so much in contemplation at this point".
"What we're looking at now is do we need more time to work on what response we're going to have to this situation, and if we do how much time, and putting an argument to the court to get that time," CASA spokesman Peter Gibson told AFP.
The engineers' union said Tiger was likely to remain grounded for "weeks".
"They have quite a way to go before they can satisfy the regulator that their aircraft are going to be in a fit state to fly," said union chief Steve Purvinas.
Australian authorities have been closely monitoring Tiger and issued the airline a "show cause" notice in March threatening to vary, suspend or cancel its licence over safety worries.
It was ordered to improve the proficiency of its pilots, boost pilot training and checking procedures, address fatigue management issues and ensure "appropriately qualified people fill management and operational positions".
CASA also ordered improvements to the airline's "maintenance control and ongoing airworthiness systems."
"Since Tiger Airways Australia was served the show cause notice there have been further events raising concerns about the airline?s ability to continue to conduct operations safely," the regulator said.
"CASA believes permitting the airline to continue to fly poses a serious and imminent risk to air safety," it added.
Barry Jackson, head of the pilots' union, said the move was a "wake-up call" for the industry and backed their claims that budget airlines were eroding national safety standards.
Tiger said the suspension related to "two recent operational incidents" -- reportedly involving aircraft flying dangerously low -- and it would cooperate fully with CASA.
"In the meantime the airline is doing all it can to minimise passenger disruption, especially for passengers who are travelling this weekend and over the next week," Tiger said, promising full refunds or ticket credits.
The grounding comes at the beginning of the extra busy school holiday period, throwing travel plans into chaos.
Budget rivals Jetstar and Virgin both promised to lay on extra flights to help stranded passengers and said they would offer special fares to those hit by the Tiger ban. Flag carrier Qantas also offered discount flights.
Qantas engineers called off strike action scheduled for next week at the request of the government to ensure disruptions were kept to a minimum.
"All our actions for next week have now been cancelled," said Purvinas.
But there were angry scenes at the nation's airports, where many passengers only learned their flights had been axed when they arrived to check in.
"You get here and then they're banned, 'sorry no flights'," said one woman. "This is just pathetic."
The ban comes at a fraught time for Australia's aviation sector, with industrial unrest brewing at Qantas and airlines still reeling from the unprecedented chaos caused by Chile's ash cloud.
Hundreds of thousands of passengers were stranded following the eruption of the Puyehue volcano, costing airlines tens of millions of dollars at a time they are already suffering from high oil prices and a surging Australian dollar.
Qantas has estimated losses at more than $200 million this year due to the Chilean ash, local floods and earthquakes in Japan and New Zealand.
