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Air Australia goes under

Posted by: 3AW Radio | 17 February, 2012 - 7:52 AM
Air Australia's financial issues strand thousands

UPDATE: Up to 4,000 passengers stranded by the grounding of budget airline Air Australia have been told they're on their own.

The airline suspended all flights early this morning after calling in administrators.

About 300 people have lost their jobs at the Brisbane-based carrier.

Holidaymakers in Thailand, Bali and Hawaii are among those who have been left without a flight home.

Passenger Michael, who was on his honeymoon in Thailand, says they're desperately trying to find a way to get back to Australia.

Meantime the Gillard Government says it will do what it can to help those stranded passengers.

Qantas and Jetstar are also looking to accomodate holiday makers but say their flights are almost full already.

Both airlines will look at adding extra services.

PDF - Air Australia 'Frequently Asked Questions'

PLAY - Qantas chief Alan Joyce speaks to 3AW's Neil Mitchell

*Scroll down to hear Ross and John's chats with a stranded passenger, a travel agent and the program reporter who highlights the bureaucratic handballing now taking place*

EARLIER: Hundreds of Australian travellers are stranded overseas after troubled budget airline Air Australia dived into administration today.

At least two international flights bound for Melbourne - from Phuket and Honolulu - have been grounded,  leaving travellers stuck in Phuket and Honolulu.

Five domestic flights between Brisbane to Melbourne today have also been cancelled.

Qantas CEO Alan Joyce has offered to try to help stuck travellers.

"Jetstar is looking at adding supplementary services to help those passengers,’’ Mr Joyce told the Seven Network. He said Qantas would also try to add services.

"If the (Air Australia) passengers come to a Qantas desk, a Jestar desk, show their ticket, we’ll give them a ticket for the same value they’ve paid with Air Australia, so they don’t have to pay anymore and they can try and recover that fare from their travel agencies or their credit card suppliers,’’ he said.

Caller Katerina told Melbourne radio that she and about 300 other passengers booked on the Air Australia flight due to arrive in Melbourne from Phuket this morning learnt at midnight the airline had gone bankrupt.

"They gave us a letter on Air Australia letterhead saying that they had gone into administration and pretty much find 'your own way home',’’ she told 3AW Breakfast.

Another stranded passenger, Sarah McGavin, said travellers at Phuket were originally told little about what was going on.

"We have been told that the flight was delayed twice and then nothing for several hours," she told the Nine Network. "Then we had passengers go up and ask, the rumour mill went around that they had gone into administration."

She said that she has managed to get another flight back to Melbourne, but others were not so lucky.

"Three friends that I am travelling with now have to leave the airport to an internet cafe and they’re not flying out for another 48 hours. It’s costing a lot of money,’’ she said.

A Melbourne Airport spokeswoman said a Honolulu flight due to arrive in Melbourne at 5.25pm had also been grounded.

''All Air Australia flights have been cancelled,'' the spokeswoman said.

In a statement on its website the company says the director of the Air Australia group of companies has appointed John Park and Mark Korda of KordaMentha as voluntary administrators today.

The Brisbane-based carrier, previously known as Strategic Airlines, and relaunched in November 2011, has flown domestic routes and to Bali, Honolulu and Phuket.

Cancelled flights

Melbourne to Brisbane (11.20am, 5.45pm)
Brisbane to Melbourne (9.40am, 10.40am, 5pm)

Melbourne to Phuket (11.25am)
Melbourne to Honolulu (7pm)
Phuket to Melbourne (8.25am)
Honolulu to Melbourne (5.25am)

- Georgia Wilkins, The Age

PLAY: Jeff, an affected passenger, speaks to Ross and John


Qantas cuts jobs as profit falls

Alan Joyce Qantas will cut about 500 jobs as a result of a review of its maintenance and catering businesses, early retirement of aircraft and the ditching of two international routes. Read the latest here and listen to Hinch's related interview.

Blog comments Your Say

  • Australia cannot compete with Asian based airlines internationally. End of story. The abolishment of workchoices didn't help airlines either as all wages doubled overnight according to garry.

    jason Monday 20 February, 2012 - 8:14 AM
  • I booked a family holiday to Phuket on the 6-2-12 through the supposedly reputable travel agent Flightcentre. Only 8 business days after booking and spending $4900 dollars on australian airlines tickets the airline goes into receivership.
    I would have thought Flightcentre would have had some idea that Australian Airlines were in some trouble prior to me making this booking.
    Thats not all, I asked the travel agent for fully comprehensive travel insurance that will cover me and my family for every aspect of my holiday, only to find out after the fact that this insurance policy did not cover Australian Airlines. Travel sure had stopped insuring Australian airlines from the beginning of December 2011. That tells me that someone new something. This very important aspect of the policy was not disclosed to me upon purchase. If flightcentre new I was flying with Australian airlines surely this information should have been disclosed to me upon purchase.
    Why sell me that insurance with those airline tickets knowing that I am not covered. Australian Airlines should not have been taking bookings if they were aware they were in this much financial strife.
    Baton down the hatches people because this country is going to the dogs.
    I want my hard earned money back, I have been robbed by corporate greed and someone needs to pay.

    Mark Sunday 19 February, 2012 - 8:52 PM
  • Melissa & I say that Virgin Australia should buy Air Australia from their Administators and bring Air Australia into ti Virgin Australia fold.

    JASON & MELISSA FROM BORNIA & FERNTREE Sunday 19 February, 2012 - 5:56 AM
  • When Gillard and Labor are Dumped Big Time , send them individual bills for all the damage they have caused.Include the 4 Billion its costing us Tax payers to keep detainees.Send them all packing, Labor and the detainees, in the same plane, save us a bucket load.

    janet p Friday 17 February, 2012 - 6:01 PM
  • Mylene both Labor and Liberal are in a race to sell out the country and Labor are winning that race. Both of them have privatised our assets and I hope one of these days a politician will be charged with Treason.

    Mark Friday 17 February, 2012 - 1:10 PM

    KEN Friday 17 February, 2012 - 12:49 PM

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