Hundreds Of Phuket Passengers Stranded As Air Australia Goes Bust

[george]

BUDGET AIRLINE AIR AUSTRALIA GOES BUST

Passengers stranded as Air Australia goes bust

Air Australia placed into administration

Hundreds of passengers have been left stranded in Thailand after Air Australia, previously called Strategic Airlines, went into voluntary administration.

- Thousands left without flights

- 300 Air Australia staff stood down

- Company unable to pay for fuel

- Questions about when the company went broke

- No flights in the 'short to medium term'

Thousands of Australian travellers have been left without a flight in or out of the country as troubled budget airline Air Australia dived into administration today.

Most of the airline’s 300 staff have been stood down as about 4000 passengers are left to search for alternative flights on their own as administrators probe the possibility that the company was trading while insolvent.

At least two international flights bound for Melbourne - from Phuket and Honolulu - were grounded after they were refused fuel.

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

Administrators KordaMentha directed stranded passengers to contact other airlines immediately to try to reschedule their flights.

‘‘It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately,’’ KordaMentha said in a statement on the airline’s website.

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

KordaMentha founder Mark Korda said there were about 4000 passengers whose flights would be grounded today as a result of the airline’s collapse.

He said most of the airline’s 300 staff had been stood down, effective immediately.

Mr Korda said flights were suspended at 1.30am after the company was unable to pay for a fuel for a Melbourne-bound flight departing from Phuket.

-- theage.com.au 2012-02-17

[george]

Thousands stranded overseas as Air Australia placed in administration

Air Australia launched as a low-budget carrier in November.

THOUSANDS of Air Australia passengers are stranded overseas after the budget airline was abruptly placed into administration overnight.

More than 4000 travellers have been told to find another way home after the airline's fleet was grounded indefinitely.

"There's about 4000 people overseas and they actively need to manage their own affairs, our call centre can take the calls but they should not be relying on Air Australia to get them back," Mark Morda, a spokesman for administrators KordaMentha, told 3AW.

"They actively should be trying to find another airline, during the night we’ve also talked to Qantas, Jetstar and Virgin."

He said the airline had run out of money to refuel its planes overnight.

"We've had to suspend operations at the moment, that’s the first thing we’ve done and it’s possible we’ll be able to find a white knight to save the airline but it's early days yet," he said. The administrators said that people who had paid by credit card or have travel insurance are highly likely to get refunds but those who paid in cash may have lost their money as the airline had no cash for refunds.

"Unfortunately if you paid by cash, it is likely you will not be entitled to a refund unless you took out insurance AND that insurance covers an event of insolvency," the administrators said in a statement.

Mr Korda said the situation was complex, with about 300 employees of the company also in limbo as it has no funds.

Chaos mars couple's honeymoon

Honeymooners Michael and Tiffany Ilyine are among hundreds of Australians stranded in Phuket after their flight was cancelled overnight.

Mr Ilyine, from Geelong, said the couple had been due to fly out at 7.30pm Phuket time after their 10-day honeymoon in Koh Samui.

The couple had checked in to their flight and their bags were loaded onto the plane but they were never able to board.

Mr Ilyine said the plane's departure was delayed a number of times before passengers were handed a press release from KordaMentha after midnight.

It said: "In the short term, the fleet will be grounded. It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately."

"For clarity, it also appears highly unlikely there will be any flights in the short to medium term. You should make alternate travel arrangements."

Mr Ilyine said there were no Air Australia staff in the terminal to speak to passengers.

"The information from the airline is that there would be no assistance," he said.

"There was no communication from them at all, there were no ground staff and air staff said that they refused to answer the phones and weren’t able to be contacted.

"There's a planeload of mainly Australians who have been dispersed from the airport with nothing really apart from a press release."

The couple managed to book accommodation five minutes from the airport and was trying desperately to find flights home on other airlines.

Mr Ilyine said most of the flights were booking out fast as passengers scrambled to get home.

Dozens of flights cancelled

Qantas CEO Alan Joyce said Qantas and Jetstar would try and help stranded passengers.

"They're actually very full on Jetstar services but Jetstar is looking at adding supplementary services to help those passengers,'' Mr Joyce Channel Seven.

He said Qantas would consider adding extra 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," he said.

"So they don't have to pay any more and they can try and recover that fare from their travel agencies or their credit card suppliers."

A Jetstar spokesman said it was working to see what it could do to help stranded Air Australia passengers in Phuket.

Mr Korda said he was aware of trouble with the supply of fuel before he went to bed last night.

KordaMentha was the company which handled the demise of Ansett.

Six Air Australia flights were due to land in Melbourne today, two from Phuket and four domestic flights from Brisbane.

Another four were due to land tomorrow including two from Honolulu in Hawaii.

A total of 40 flights were due to fly to Melbourne over the next week and all have been cancelled.

The Federal Government has been in touch with consuls in Hawaii, Bali and Phuket on advising stranded passengers.

"Travellers should get in touch with their tour operator and/or insurance company," the Department of Foreign Affairs and Trade said.

"If you are unable to contact them, you should call the Department of Foreign Affairs and Trade's 24-hour Consular Emergency Centre on +61 2 6261 3305.

"Our Embassy will continue to remain in close contact with local authorities on the latest situation."

It urged anyone worried about family or friends to try to contact them directly first.

"If you are unable to contact them and still hold concerns for their welfare, you should call the Department of Foreign Affairs and Trade’s 24-hour Consular Emergency Centre on within Australia on 1300 555 135 or if overseas on +61 2 6261 3305."

Airline denied having money trouble

Air Australia is the new passenger airline of charter firm Strategic.

It was re-launched three months ago as a discount holiday airline, flying to Hawaii, Phuket and Bali from its home base in Brisbane.

But it also flew to Hawaii from Melbourne, with daily flights from Wednesday to Sunday.

Its domestic routes included a daily flight Melbourne to Brisbane and it also served the booming mining areas of Western Australia, with flights from Perth to Derby and Port Hedland.

Only yesterday Air Australia, which has five aircraft including two twin-aisle Airbus A330s and two smaller Airbus A320s, was still taking bookings over the internet.

The first sign of trouble for the airline came this week when it was revealed that it had been unable to pay aviation fees and charges to Air Services Australia.

The airline was also being pursued over debts for terminal leasing at Perth Airport and over other charges it had not paid to Melbourne Airport.

It claimed less than 48 hours ago it was in no financial strife and denied claims it had also been late with payments to travel agency flight centre.

Air Australia leased some aircraft via its European arm, including enlisting one aircraft from Turkish airways Atlas Air to operate on routes from Australia into Asia.

That aircraft was crewed by Turkish nationals, about a dozen of whom worked with Air Australia, with a number of Thai aircrew also employed on Thai wages and conditions.

It's understood some of the Thai crew, which were reputedly on a wage of around $90 a day in Australia, have been stranded in Melbourne.

Their plight is likely to intensify political pressure from Senator Nick Xenophon, who has put forward draft legislation requiring Australian airlines to pay local standard wages to all crews flying on domestic sectors in Australia.

Aviation analyst Tony Webber said the pressure on Air Australia would have been greater due to the rising cost of aviation fuel, which this week hit $130 a barrel.

Mr Webber said it would have been difficult for Air Australia to pass on the extra cost of fuel and maintain its cheap fares, which were advertised as low as $600 return to Phuket.

The company is almost totally owned by entrepeneur Michael James, whose Strategic Group also owns a charter operation in Europe.

The cancellations come a day after Qantas announced it was shedding 500 jobs due to tough business conditions.

- AAP 2012-02-17

[george]

Air Australia's Twitter and Facebook pages are no longer working

[ShanePashen]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

Edited February 17, 2012 by metisdead

[ShanePashen]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

This is all get. No chance of refund as paid Eftpos (cash)

http://www.airaustra...lia%20FAQs.ashx

[KKvampire]

so Australia has no insurance protection scheme in law for it airline passengers as there is in Europe? Sucks

[ThaiPauly]

Launched in NOVEMBER and already bust....amazing miss-management

[giddyup]

I guess sticking to the established airlines is the only way to go.

[chooka]

Launched in NOVEMBER and already bust....amazing miss-management

It changed it's name in November. It wasn't launched in November. (Founded in 1991 as an air freight broker and trading as Air Charter Logistics, Strategic Aviation Pty Ltd) The entire airline industry in Australia is going under. Qantas has just announced major layoffs including 50 pilots and it is cancelling routes to the U.S and Asia.

Edited February 17, 2012 by chooka

[FOODLOVER]

Hey i got a great idea, lets seize all the airplanes and kick the employees to the curb until payment. After all not their problem, they paid so the airplanes are theirs, right! SCWRM whats right and fair, FROCem! Although i bet they handle the situation a might bit better that the manager at Hotel St.----.

[jshorts]

Why would anyone today pay in cash for any major purchase and not a credit card?

Some homeowner rider policies might cover losses such as this.

[David48]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

This is all get. No chance of refund as paid Eftpos (cash)

http://www.airaustra...lia%20FAQs.ashx

Poor ole' Shane ... not have much of a run of luck are you recently?

A perfectly valid excuse why you can't give your girl the salary she requested now!

Karma works in stange and mysterious ways.

[haveaniceday]

This company has actually been around for about 7 or 8 years operating a A330 and more recently some A320's.

They changed their trading as name in November from Strategic Aviation.

The majority of this time they have used a Portuguese registered aircraft, crewed by a mixture of crews form that country and Australians.

It was not uncommon for Australian Cabin crews to be off duty in the back of the A330 departing East coast Australia, several stops to the middle east, then being active crews on the return to Australia, being on board for over 40hrs straight.. This route normally had two teams of cabin crew on board each way, due to some tech stops along the way, mainly, Darwin, Deigio Garcia, Male`, Dubai, I still don't know how they got that dispensation ????

The package on offer to the Australian pilots were pathetically below industry standard, people took them for their own reasons, be it first jet job, or wanted to be home and it kept them busy.

It is never a good day when this crap happens.

[happysanook]

there's something criminal about all this.... leaving thousands stranded and basically stealing their money, time and plans....but let's put another pot dealer in jail instead.

[KKvampire]

Launched in NOVEMBER and already bust....amazing miss-management

It changed it's name in November. It wasn't launched in November. (Founded in 1991 as an air freight broker and trading as Air Charter Logistics, Strategic Aviation Pty Ltd) The entire airline industry in Australia is going under. Qantas has just announced major layoffs including 50 pilots and it is cancelling routes to the U.S and Asia.

Yes so all the foreign airlines will be able to operate out of Australia and not have the high costs of running a business as an Australian company , either that or no airtravel except private jets

Edited February 17, 2012 by KKvampire

[supaprik]

very sad about this news, I flew when it was Strategic a few times business class and it was excellent both in service ,cabin and price...

[airconsult]

so Australia has no insurance protection scheme in law for it airline passengers as there is in Europe? Sucks

I agree, I believe it has been debated there before, however instead of rushing into it the federal government was considering the risks vs costs, as it does form an extra cost of entry into the market over and beyond what the warsaw and montreal conventions require. Basically the government would say "caveat emptor" - is it really something that happens so often it needs extra regulation and government involvement? Particularly when personal travel insurance is an option, and not at a high cost.

All that said - very sorry for the people who have been burned.

[fishhooks]

Makes one wonder though.

Air Asia "seems" fine, but haven't they recently announced pulling out of London and Europe?

[chooka]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

Qantas just announced on Australian radio that they have aircraft on the ground in phuket and will fly passengers back to Aus for $600 AUD excluding surcharges and taxes. expensive for a oneway flight.

[airconsult]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

This is all get. No chance of refund as paid Eftpos (cash)

http://www.airaustra...lia%20FAQs.ashx

Poor ole' Shane ... not have much of a run of luck are you recently?

A perfectly valid excuse why you can't give your girl the salary she requested now!

Karma works in stange and mysterious ways.

Directed at OP.

Shane, you could consider Air Asia X - they run a route from KUL to OOL (Cooloongatta) at pretty reasonable rates. From KUL there are several flights to HKT.

From brisvegas to OOL - Qld rail offers a rail-bus service.

Sorry about the loss, but when Strategic rebranded it's passenger services back in November it set off warning bells in my mind. Luckily for the miners, I believe Strategic kept the mine flights labelled as charter, not scheduled, so they may still be running.

Cheers

[KKvampire]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

Qantas just announced on Australian radio that they have aircraft on the ground in phuket and will fly passengers back to Aus for $600 AUD excluding surcharges and taxes. expensive for a oneway flight.

Qantas see it as an opportunity to make money , and they need it

[whybother]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

Qantas just announced on Australian radio that they have aircraft on the ground in phuket and will fly passengers back to Aus for $600 AUD excluding surcharges and taxes. expensive for a oneway flight.

That's not going to help if you haven't left Aus yet.

[airconsult]

Launched in NOVEMBER and already bust....amazing miss-management

It changed it's name in November. It wasn't launched in November. (Founded in 1991 as an air freight broker and trading as Air Charter Logistics, Strategic Aviation Pty Ltd) The entire airline industry in Australia is going under. Qantas has just announced major layoffs including 50 pilots and it is cancelling routes to the U.S and Asia.

Yes so all the foreign airlines will be able to operate out of Australia and not have the high costs of running a business as an Australian company , either that or no airtravel except private jets

Ah - I'd look closer at those figures - 2 airline CEO's have been doing some very sneaky bookkeeping, involving transfer of many costs from the low-cost subsidiary to the full fare subsidiary. The full-fare company is perfectly profitable without those extra costs, however if you present it this way then eventually you can declare the full-fare insolvent and escape the sale restrictions placed on it many years ago - then sell the low-cost arm for a tidy windfall and retire on the enormous bonus you received.

Certain politicians are aware of this, and are seeking to modify the sale act to close this loophole.

It's been quite obvious what was planned - the first step was to transfer all major assets (planes) to a parent holding company - and let the full-fare lease them back. Then the holding company establishes a new low-cost subsidiary - note that the holding company owns both the low-cost and full-fare, but operates them as separate Ltd liability. The bit they are going to get caught out on eventually is that the full-fare ends up paying many of the costs of the low-cost for no renumeration, this (if the auditors are awake ad honest) should have been reported, as it is essentially robbing the shreholders of the full-fare.

Cheers

(edited to add a little more detail)

Edited February 17, 2012 by airconsult

[airconsult]

Makes one wonder though.

Air Asia "seems" fine, but haven't they recently announced pulling out of London and Europe?

I believe they're looking at the carbon tax proposed in the EU on all flights, and the rise in UK landing costs has also been extortionate - that starts to force the ticket price up so much that they lose their customer market sweet-spot. No doubt they've been seeing sinking pax load figures and sensibly decided there are routes they could use those planes on with a better return.

Cheers

[LukDod]

Recently, it was Russian tourists who have been stranded by unscrupulous Russian tour agencies,

today it's the Aussies being stranded by a mis-managed Aussie airline.

I wonder what nationality will be hit next by businesses in their homeland?

My bet is on the Greeks

[thaihome]

Makes one wonder though.

Air Asia "seems" fine, but haven't they recently announced pulling out of London and Europe?

That would actually be Air Aisa X a separate unit that does the long haul flights. There are indeed concerns about the financial health of Air Asia, though they are not well reported due to overriding Malaysian nationalism issues.

TH

[maidu]

Is there any good news coming out of Phuket? We hear of daily jetski extortions, robber taxis, trashed beaches and water, Russian travel agency problems, ....now this airline problem. I stopped going to Phuket years ago for lesser reasons. How about clear all the people out and let it revert to the natural splendour it once was - before people came along to trash it.

[asdecas]

I'm afraid it's the risk you take with budget airlines - I use Cebu Pacific a lot, often booking several flights months ahead, but, with their low fares and frequent discounts, I always suspect that one day the plug will be pulled. Still, five years and counting, OK so far....

[chooka]

I am due to fly with them return in 2 weeks to HKT from BNE

Thanks you pack of <snip>!!!

I have done my $900 Aud cold.

Qantas just announced on Australian radio that they have aircraft on the ground in phuket and will fly passengers back to Aus for $600 AUD excluding surcharges and taxes. expensive for a oneway flight.

That's not going to help if you haven't left Aus yet.

True but this topic is about Aussie passengers stranded in phuket and not Aussies stranded in Australia.

[jalansanitwong]

The simple fact is Australia is too far away for a local airline to make money at the international level. Even 'very close' Bali is similar to flying London to Moscow .QANTAS survived all these years due to government subsidies and protection from competition on its most profitable routes. Even Qantas is in trouble and is laying off staff. Qantas shares are junk.

Middle east carriers are completely taking over the fabled' Kangaroo route' from eastern OZ through Asia up to Europe. Its over.

Didnt Qantas just recently pencil out flights into BKK?

I remember 10 years ago seeing QF 747 jumbos lined up one after the other at Don Meung airport. mel,syd bne...back then BKK was a major hub for Qantasse. Apparently Emirites have rights to fly up to 100 planes a week into OZ .

Australians are too expensive to hire and fuel far too dear. Sadly another OZ industry no longer viable. Were too expensive and badly managed.

No bailouts in Australia. Doubt if we will see this airline again.

Edited February 17, 2012 by jalansanitwong