Webjet slams Labor for airline collapse

Webjet slams Labor for airline collapse
By admin

Webjet is seeking compensation from the Federal Government after insisting more should have been done to prevent the collapse of Air Australia and the subsequent financial misery that confronted travel agents and consumers.

The online retailer has twice written to Prime Minister Julia Gillard – without reply – outlining its grievances and accusing the government of “gross negligence” in failing to conduct financial checks on the carrier.

Webjet has now taken up the matter with opposition leader Tony Abbott.

Non executive chairman David Clarke told Travel Today the government has a duty to ensure airlines are solvent.

When it finally stopped flying, Air Australia had racked up losses of $65 million with debts of between $80m and $90m.

“The government was warned by a number of parties that Air Australia had issues but it buried its head in the sand,” he said. “And now the Prime Minister can’t be bothered to reply to letters from a publicly listed company. It’s a fiasco.”

The government requires airlines to be licenced and chooses to “exert administrative control" through CASA (Civil Aviation Safety Authority), but then does nothing to ensure the carrier’s financial viability, Clarke said.

“We think it is grossly negligent to allow a bankrupt airline to continue operating,” he continued. “We suffered credit card charge backs from the collapse and we have indicated to the Government that we consider they have a responsibility to pay up.”

Clarke said the amount of money was “not material” but said Webjet was acting on a matter of principle.

Agents learned last week that they will receive only 21.88 cents in the dollar for refunds lodged with the International Air Transport Association (IATA) following Air Australia’s demise.

It ignited fresh calls for more effective government scrutiny of a airline’s financials, a cause championed by Australian Federation of Travel Agents (AFTA) chief executive Jayson Westbury.

Clarke said he fully supported Westbury’s stance while Air Tickets general manager Russell Carstensen urged the AFTA leader to keep lobbying.

“The refund amount was disappointing. I hope Jayson keeps going with the call for greater scrutiny,” he said.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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