News

Industry reacts to Air Australia woe

Travel agents and wholesalers are frantically working to help thousands of stranded Air Australia passengers as the low cost carrier went into voluntary administration overnight, just three months after its launch.

The carrier was reportedly unable to refuel its planes in Phuket last night, prompting the appointment of administrators KordaMentha at 1.30am this morning.
Its entire fleet of five Airbus A330-200 and A320-200 aircraft is now grounded voiding the 100,000 tickets sold and leaving up to 4,000 passengers struggling to get home from Bali, Phuket and Honolulu.
“It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately,” a statement from KordaMentha confirmed.
The administrator said that it was “too early” to predict the position of the airline or to be precise about the reasons for the group’s problems, but it stated that it was “highly unlikely” that flights would resume in the short to medium term.
It has called for immediate expressions of interest in the sale of business, which comprises seven companies including Air Australia, Strategic Engineering Australia and Strategic Aviation Charter.
Meanwhile, Qantas and Jetstar have pledged to help those stranded, offering tickets at the same price as the Air Australia.
Creative Holidays said it was working to resolve the situation for its “small number” of clients in Hawaii, Phuket and Bali, but said it was unable to process any refund requests at this time.
People who have booked with the airline should contact their credit card issuer or travel agents to find out if they are entitled to a refund. Cash bookings will not be refunded, unless covered by an insurance policy.
Insurance firm Cover More and Flight Centre had raised question marks over the business’ financial position at the end of last year. But the airline dismissed insolvency concerns as unfounded and convinced Flight Centre of its sound footing with the two signing a commercial deal.
A spokesman for Flight Centre described it as a “very sad” development. He said agents were assisting “thousands” of clients already overseas and those yet to travel.

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