Hundreds of tourists were stranded in Bali last month when the carrier's flights were grounded temporarily after the airline allegedly broke Indonesian regulations.
"We have been advised by Indonesian authorities that in order to continue operating our flights to Bali, we would have to transfer to a new operating model that would take at least six months to implement," Tigerair chief executive Rob Sharp said.
That "would compromise our ability to offer low-cost airfares to Australians," the statement said. "Providing a reliable, low-cost service is critical for Tigerair Australia and our customers, and therefore our only option is to withdraw from flying to Bali altogether."
Sharp said it was working with Virgin Australia, Tigerair's parent company, to help passengers in Bali return to Australia.
Customers booked to travel to the island would be offered refunds. Six flights were affected by the cancellations last Friday.
Source: AFP
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