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Air Australia grounded, in administration

written by australianaviation.com.au | February 17, 2012
Air Australia A320 VH-YQC.

The travel plans of hundreds of passengers have been thrown into disarray with the financial collapse of Air Australia, with the company’s director calling in John Park and Mark Korda of KordaMentha as Voluntary Administrators in the early hours of this morning.

“It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately,” the administrators say in a statement.

“For clarity, it also appears highly unlikely there will be any flights in the short to medium term.”

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Mark Korda subsequently told ABC Radio that the airline was unable to pay for fuel for flights. Industry rumours had long suggested the airline had to pay for fuel with cash in advance.

Approximately 300 employees will likely lose their jobs.

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12 Comments

  • Dan

    says:

    What a shame. Lets hope some how it can be re-ignited. I have only heard good comments on those who flew with them.

  • Jason Bendeich

    says:

    They managed to fly as Strategic for a few years and then they changed their name and now this. I was waiting for them to add new routes to build up their business but they were very slow in doing do. Untouched routes such as Adelaide-Newcastle or Canberra-NZ could have been trialled etc etc. There was very little advertising, their website didn’t come on line until the last minute – it was all very low key – not the way to go for an airline. I believe that most people will only now realise the airline exists as it appears on their tv screens about it’s demise. A good marketing dept. may have assisted them.

  • Stephen

    says:

    My partner & I have tickets for Phuket for July. What happens now? Can we get a refund? Do we have any statutory rights as a consumer? Do they have insurance to pay all of it’s customers back? Not good enough 🙁

  • Chris

    says:

    could see this coming about 6 months ago…I was surprised they had the money to re-paint the fleet

  • Cooper

    says:

    Chris they didn’t repaint the fleet. Only one a320 has been painted with the new livery and that’s because it was a recently added aircraft. As for Stephen. The airline has no money so they will not reimburse you any amount. Jetstar and qantas as offering flights for the same amount that you paid for air Australia. If you paid for credit card. Ring your credit card company about being refunded the amount.

  • Ellis

    says:

    Stephen – if you have paid with a credit card, contact your bank about getting the money back. Other than that, if you have travel insurance that is the next option, or as a last resort maybe the Travel Compensation Fund, but best bet is the credit card.

  • James

    says:

    Cooper – both YQB and YQC were repainted. As soon as they commenced domestic services I knew they were doomed… Interesting to see under the strategic group OzJet.pty is listed…

  • Kenny

    says:

    I understand that the Travel Compensation Fund only works with collapses of registered travel agents and not airlines (although they did reimburse during the Ansett collapse because Ansett was registered as a travel agent which I don’t think Air Australia are). If you didn’t purchase with a credit card or take out travel insurance, I think you’ve done your dough. A case of caveat emptor.

  • Ben

    says:

    I had tickets for travel to Phuket in March…oh well. I really must stick to better airlines. I’ve lost money now with Ansett, Canada 3000 and Viva Macau..I’m starting to think it’s me… I contacted my bank yesterday (ANZ) and have filed a credit card transaction dispute. They rang me after I filed the form and told me they would have an answer for me in 5 working days. I shall post their reply on this board. I’m not holding my breath though…if there is any way a bank can weasel out of giving money back, I suspect they will take it.

  • Neil

    says:

    Strange how when they were operating Charters,& FIFO Mining flights they were doing OK,but as soon as they decided to start up as a fully fledged Airline there were troubles.
    The timing was wrong especially in an Airline environment when Airlines worldwide have collapsed,and Airlines like Qantas are cutting back their Airline.The Costs associated with running an Airline these days have gone through the roof,with Wages& ,Fuel
    It was a very risky venture and the wrong time to start the Airline

  • Neil

    says:

    I seems like it was the wrong time to start up an Airline in the current aviation climate.First with Ansett collapsing all those years ago,and Airlines that never really got going like Compass,and Ozjet,and also with Qantas cutting back services and Airline staff,it was always going to be a risk.

  • Ben

    says:

    A quick update – the ANZ have refunded the cost of my tickets. Great news. I hope people who have credit cards with other banks have the same luck!

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