Hundreds Of Phuket Passengers Stranded As Air Australia Goes Bust

[haveaniceday]

You normally get slugged with a online booking fee, not a 2% fee.

[ydraw]

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

Getting taxed over 50% of your income sucks more.

[jshorts]

Sad news. What always gets me is it happens overnight-surely for weeks they knew cash was low and they couldn't pay the fuel bill, but probably sold tickets last night.

I really hope the other carriers will step up and offer low rates for these pax who are stranded. I really think any Govt should mandate a fair fare in these extreme times when a carrier goes bust.

You want the Government to get yet more involved in private business affairs? Should the Government get involved in all bankruptcies?

Why would any carrier want to step up and offer an unprofitable ticket to anyone?

[whybother]

It reflects badly on Australia. The Australian government should bail them out to get all the passengers home and then take possession of the planes.

The planes are probably leased, so taking possession of them won't help.

[ydraw]

No one should travel without travel insurance these days. In my experience, even paying by credit card doesn't ensure any help whatsoever any longer.

It surely does. A chargeback on a major credit card will get your money back, unless the company in question feels like taking Mastercard/ Visa to court, which would be like trying to beat back a tsunami with a bucket.

Why would any carrier want to step up and offer an unprofitable ticket to anyone?

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Isn't there always something criminal about any company that goes "belly up" and can't pay its bills?

Trading while insolvent is a crime (at least in Australia), but that isn't always the case. It might have just been a short-term liquidity problem that caused them to be unable to pay, in which case it's horrible business management but not an actual crime.

Reading all the replies here begging the government to get involved in a private business matter makes me a sad panda. When the government ran airlines, Australia had the worst service in the world.

Edited February 17, 2012 by ydraw

[Yoknapatawpha]

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

my bet is on the States...

[siamdivers]

No one should travel without travel insurance these days. In my experience, even paying by credit card doesn't ensure any help whatsoever any longer.

As noted above, travel insurance is cheap and affordable and easy to get online in minutes. The good thing about AirAsia too is that they do offer insurance as an option when booking.

It's nice it's an option in case you've purchased it elsewhere, nothing no one hates more than paying double for something.

Be careful of Air Asia's insurer - have you always read the fine print? Here's an example - If I flew to KUL on Thai Air Asia (with insurance), the policy reads that it is only valid for Thai Citizens and residents - ok. But now I take a flight from KUL to HKG.... the insurance now reads as only valid if I am a Malaysian citizen or permanent resident.

Always read the fine print.......

Good tip indeed.

[saroq]

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

Thanks you pack of wanke_rs!!!

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

They sure do but they're clawing money back by trying to reduce the employment conditions of ground and cabin staff and by seeking to employ staff outside of Australia so they don't have to abide by Aussie rules. All so they can pay the CEO $5,000,000 a year. Yep that was 6 zeros.

[SGD]

Chasing the lowest cost for everything is an Australian trait I have seen in many people I have met from that country. Unfortunately that desire to get it for the cheapest price possible is paramount even to the desire for quality. A big steak is better than a tasty steak seems the motto.

[siamdivers]

No one should travel without travel insurance these days. In my experience, even paying by credit card doesn't ensure any help whatsoever any longer.

It surely does. A chargeback on a major credit card will get your money back, unless the company in question feels like taking Mastercard/ Visa to court, which would be like trying to beat back a tsunami with a bucket.

Why would any carrier want to step up and offer an unprofitable ticket to anyone?

Advertising

Isn't there always something criminal about any company that goes "belly up" and can't pay its bills?

Trading while insolvent is a crime (at least in Australia), but that isn't always the case. It might have just been a short-term liquidity problem that caused them to be unable to pay, in which case it's horrible business management but not an actual crime.

Reading all the replies here begging the government to get involved in a private business matter makes me a sad panda. When the government ran airlines, Australia had the worst service in the world.

Yes, true, but it seems that some kind of a bond or other insurance type of guarantee should have been in place in case something like this happened. The deregulation in Oz and other places (the US too decades ago) has been good, but there has to be oversight and responsibility as well. I think a lot of people assume that there is such a system in place, especially older people. Requiring a $1 million or $5 million bond, whatever the amount, would ensure that the customer was taken care of, and tickets home paid for.

I think the airline does have some kind of responsibility to their customers to at least ensure they get home.

[Robbie Dye]

Indeed Air Asia X are falling off London and Paris routes, couple this with Qantas dropping BKK London and BA dropping BKK Sydney, Air France cutting BKK Paris to three a week and you start to get the picture. As a professional in this industry it is clear now that the Gulf Carriers like Qatar, Oman, Etihad and Emirates are the way to go to Europe. I feel really sorry for you Australians affected but there is a going to be a massive drop in seat availability to Aus which will lead to even higher prices.

[stevenl]

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

Also in Europe only for packages, not for stand alone flights.

[TechnikaIII]

"TO SOME, insolvency guru Mark Korda is Dr Death, ... "

You get what you pay for..

Cheap, so-called "budget airlines" have been the cancer of the industry. Until the tumor is removed, and the "I want everything for nothing" attitude has been eradicated, there will be no cure.

Assuming that all those stranded passengers are literate, they can't claim total innocence. Their predicament is their own doing. ...

Have you ever heard that one .. "If it sounds too good to be true, it probably isn't." ... ?

Error contains the seed of it's own destruction.

Edited February 17, 2012 by TechnikaIII

[airconsult]

I think the airline does have some kind of responsibility to their customers to at least ensure they get home.

Yes - under both the warsaw and montreal conventions governing international air travel - once you have paid the carrier bears a responsibility to transport you to the destinations. However the 2 major problems with that is it doesn't say how or when. The conventions were drawn up primarily in the interests of making the laws common between countries without adding too many burdensome costs on airlines - this was allowed as airlines are a strategic asset of a country in times of war. (among other reasons)

Cheers

[OldSalty]

What a lot of BS I had to read when reading through the answers. Whether it is a budget or a non-budget airline the PAX have paid for the tickets, otherwise they would not carry them and now it is the responsibility of the airline to get them back at no extra costs. All we need is better consumer protection and nothing else, but the reality is different and that is the problem. Personal resposibility seems to be a dirty word in our world, thanks to the new and dynamic management that is ruling the world now.

Edited February 17, 2012 by OldSalty

[TechnikaIII]

No one should travel without travel insurance these days. In my experience, even paying by credit card doesn't ensure any help whatsoever any longer.

As noted above, travel insurance is cheap and affordable and easy to get online in minutes. The good thing about AirAsia too is that they do offer insurance as an option when booking.

It's nice it's an option in case you've purchased it elsewhere, nothing no one hates more than paying double for something.

Be careful of Air Asia's insurer - have you always read the fine print? Here's an example - If I flew to KUL on Thai Air Asia (with insurance), the policy reads that it is only valid for Thai Citizens and residents - ok. But now I take a flight from KUL to HKG.... the insurance now reads as only valid if I am a Malaysian citizen or permanent resident.

Always read the fine print.......

I discovered the same with a Norwegian airline, .. reading the fine print just before clicking "Purchase Insurance". It's a scam. One should be warned with a pop-up "Are you a Norwegian citizen ... Thai .. Malaysian .." etc. But nope, and once they've got your money that's it.

[SiamRose]

10K Baht a month for an Asian air hostess or $2500 Aud for an Australian air hostess

Plus the fact that the Australian weighs 30kg more - that adds up to a lot more fuel over the long term.

[SiamRose]

I have never come across an airline website that has a credit card surcharge.

Air Asia does, and so does Ryan Air. Its quite normal amongst low cost carriers.

[Darkman]

Seeing that aircraft on the ground in Phuket and not able to pay the fuel bills to fly home. Does that mean the Thai's get themselves a nice new aircraft to play with?

[airconsult]

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.

OT - mods, delete if you feel like it, as just addressing a point above about QF and route protection.

Route protection is used by almost all countries in the world (including Thailand, UK, and USA) for 2 reasons.

1. To ensure profitablity of airlines (balanced with public interest on fares)

2. To encourage local ownership of airlines. (strategic interest)

The strategic interest above is normally applied to 1 or 2 carriers depending on size of the country and economy, usually coined with the term "Flag" carrier.

A "Flag" carrier gets certain benefits (such as route protection), but in return takes on certain restrictions and responsibilities. Restrictions is normally on % of foreign ownership, and responsibilities are normally found in times of war for transport of troops or essential supplies. In other cases, deportations are normally carried out by a "Flag" carrier if the deportee does not hold a valid ticket with another airline, usually at a heavily discounted price, or even free to the government involved.

As you can see, in QF's case, it is the nominated "Flag" carrier, has been used in times of war, is governed by the Qantas Sale Act, and therefore gets the route protection as compensation. Your statement about "no bailouts" I believe came from Mr Howard (a past PM), but was one of those statements made quickly by a politician without looking at the full picture. Allowing a Flag carrier to go bankrupt is a very difficult decision - it leaves your armed forces with no guarantee of transport except their own resources - witness the 2 bailouts of BA from the UK government which I am sure holds the same attitude about competition.

Cheers

[softgeorge]

What a lot of BS I had to read when reading through the answers. Whether it is a budget or a non-budget airline the PAX have paid for the tickets, otherwise they would not carry them and now it is the responsibility of the airline to get them back at no extra costs. All we need is better consumer protection and nothing else, but the reality is different and that is the problem. Personal resposibility seems to be a dirty word in our world, thanks to the new and dynamic management that is ruling the world now.

The Korda Mentha spokesman said about 100,000 Air Australia tickets that had been sold would now be invalid.

Passengers who bought tickets on a credit card or were covered for insolvency by their insurance were likely to be entitled to a refund, he said.

[normac44]

Early this morning on Melbourne radio I heard that they were still selling tickets up to 8.00 pm last night.They must have known what was about to happen.

[airconsult]

Early this morning on Melbourne radio I heard that they were still selling tickets up to 8.00 pm last night.They must have known what was about to happen.

In spite of the laws against trading while insolvent, I'm sure they will argue that they were either:

1 - Waiting for an answer from a rescue investor

2 - Hoping to trade their way out

3 - Praying for the easter bunny to leave golden eggs this year

Cheers

[normac44]

The Australian Govt. will in all probability not bail out AA. They look like they will have to give Toyota millions more to stay here , GM are in trouble, Ford are in trouble and others.the Govt cannot help everyone who goes belly up.A travel agent once told me that if you can afford the trip overseas you can afford the insurance...wise words.

[LTGTR]

You can't have "daily flights from Wed to Sun".LOL

Daily means every day.

[airconsult]

"TO SOME, insolvency guru Mark Korda is Dr Death, ... "

You get what you pay for..

Cheap, so-called "budget airlines" have been the cancer of the industry. Until the tumor is removed, and the "I want everything for nothing" attitude has been eradicated, there will be no cure.

Assuming that all those stranded passengers are literate, they can't claim total innocence. Their predicament is their own doing. ...

Have you ever heard that one .. "If it sounds too good to be true, it probably isn't." ... ?

Error contains the seed of it's own destruction.

To many people I knew who worked at Ansett (and some have just retired or retrenched from Qantas) Kord-Mentha are almost heroes.

If you read the linked article, you will see that they have now pretty much paid ex-Ansett employees about 95c in the dollar of what they were owed - primarily though saving and then continuing to operate certain profitable parts of the business, such as the pilot training and flight simulator in Melbourne. This is money that most have given up for lost - including people that worked there for 30 years.

If all liquidators were like that, ex-Enron employees would be much better off.

Cheers

[geriatrickid]

Seeing that aircraft on the ground in Phuket and not able to pay the fuel bills to fly home. Does that mean the Thai's get themselves a nice new aircraft to play with?

No it means that the aircraft leasing company sends a recovery agent that pays all costs necessary to have the plain released. then it has to retain legal counsel in thailand and seize the plane. It can take time to execute the paperwork. In the meantime the ground fees add up. All of these costs are added to the unpaid lease payments. If the leasing company is lucky, it can sell the aircraft or lease it out again in a few months. In the meantime, the leasing company takes a financial loss, which it then tries to pass on to new clients through interest rates or charges. it also takes the loss against its profits if it has made any. If there were profits the loss reduces the taxes paid by the leasing company.

[airconsult]

The Australian Govt. will in all probability not bail out AA. They look like they will have to give Toyota millions more to stay here , GM are in trouble, Ford are in trouble and others.the Govt cannot help everyone who goes belly up.A travel agent once told me that if you can afford the trip overseas you can afford the insurance...wise words.

Exactly - it seems very harsh to say it outright, but the truth is you either pay the insurance yourself, or the airline will have to pay it, put 50% markup on it, then add it to your ticket price.

Edit - or you act as your own insurance company and accept the risk yourself - in that I mean if you are a regular business, and you fly people many places, you trade-off the risk of that airline going bankrupt and you buying another ticket for staff vs the cost of always paying for insurance. Doesn't really apply to tourists I agree.

No, they won't bail out Air Australia (sorry, I can't use AA as that is the IATA for American Airlines) - if the charter services by Strategic (mostly big mines) had been transferred to Air Australia, then possibly the South Australia and Western Australian governments would have extended a partial fund - as noone else would have the planes available to do. But as it seems to be just the scheduled passenger services - no dice.

Cheers

Edited February 17, 2012 by airconsult

[webfact]

Phuket struggles to airlift stranded Air Australia tourists

Phuket Gazette

The Phuket Airport departues hall this morning was flooded with tourists stranded by the Air Australia collapse. Photo: Atchaa Khamlo

Many of the stranded tourists spent the night at Phuket International Airport. Photo: Atchaa Khamlo

PHUKET: -- Scores of Australian tourists have been left stranded at Phuket International Airport after low-budget carrier Air Australia grounded all flights yesterday due to insolvency.

The state-run Australian Broadcasting Commission news quoted a source as saying that Air Australia was even unable to buy fuel at Phuket Airport last night for a flight ready to take tourists home.

The directors of the company met late into the night and appointed insolvency specialist firm KordaMentha as interim administrators.

The move left about 4,000 passengers stranded or having purchased tickets they will not be able to use, many of them in Phuket.

Phuket Airport Director Prathuang Sornkham this morning told the Phuket Gazette, “I was informed around midnight that about 260 Australians were stranded as their flight to Australia would not be not departing.

“Their fight was supposed to depart at about 7:30pm, but they had some problem with their business and they stopped all flights,” he said.

“Some of passengers have gone on other airlines and some went back to stay in Phuket Town.” he added.

Dealing with the chaos at Phuket Airport this morning, Australian Honorary Consul for Phuket Larry Cunningham said he was still trying to come up with an exact figure of how many people have been left stranded in Phuket..

“We’re still trying to find out. There was a flight last night to Melbourne that didn’t get out. We don’t know how many of those people eventually got out, and how many are still here. I am still waiting on manifest lists. But a lot of them are still here, because they’ve already been up to see me.

“There is a flight [scheduled] tonight to Perth, which obviously isn’t going to go. And there’s another flight [scheduled] on Sunday. At this stage there are meetings going on in Australia, I understand, for potential other airlines to cover the people left here,” he said.

Mr Cunningham explained that Air Australia is the now defunct Strategic Airline simply re-branded.

“We had a similar problem with them about a year ago when their plane broke down,” he said.

Asked if the long wait and uncertainty was taking its toll on travelers' patience, he said, “Aussies are fairly laid back as a rule. ‘Things happen, she’ll be right mate.’ That’s the sort of approach we’re seeing here.

“But if people are stranded here for more than a few days it’s hard to know what the mood will be like. But generally, all the people I have spoken to today understand that these things happen and they are remaining fairly positive. I think that news reports that other airlines will step in to help has probably comforted them as well,” he said.

One such carrier is Qantas, which recently posted the following message on its website:

“Following the grounding of Air Australia, Qantas is developing a plan to assist stranded customers. Details will be announced shortly.

“If you are holding a ticket for travel on Air Australia today, please proceed to the Qantas Sales Desk at the airport for assistance.”

Source: http://www.phuketgaz...ticle12334.html

-- Phuket Gazette 2012-02-17

[lubbkis]

My partner was on the last OASIS flight into HK. He'd paid with a debit card and several of our smartass friends were sniggering he'd never get reimbursed. Eventually, he got a good price ticket from Cathay and full payment from his card provider - that Scottish Bank that used to have a China Coast name.

A while back, was it only a year, I was stranded in KL behind some volcanic ash. Emirates told me to check-in to go to Dubai and they'd bring me to London when they could. Which hotel in Dubai will you put me up in? 555 - on your price ticket you will stay in the terminal. But that crisis looked like it would last for months. So I flew to Hong Kong, where we have a flat and I have PR, wondering if I'd ever get back to Europe. 10 days later Emirates got me back to London but charged me £135 pounds as I'd voluntarily re-routed. I got £25 a day for 10 days from my insurer so as the Air Asia flight to HK had cost about £100 was £15 in hand for incidentals. At that time, our PM Gordon Brown had advised that Brits should get themselves to Madrid from where New Labour would arrange transport. When I mentioned this in the British High Commission in Hong Kong there was a slow shaking of the head but no comment.

The way I see it, I buy low-cost flights quite a lot, so if I get caught out occasionally, MPR. Looking at £4000 for the Transsiberian railway to Calais via Beijing, was a bit scary though.

I'm sorry if Air Asia X have proved that the low cost long haul business model is not viable but Mr. Fernandes fares LGW - KUL have not been any lower than other carriers if you transit a hub.