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 Korda, 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 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 on to 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 were 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 told 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.”
Flight Centre said as many as 10,000 of its customers with future bookings would be affected.
It has an emergency team of 20 people at its Brisbane headquarters who are contacting stranded passengers and those with future bookings.
Flight Centre has an emergency number for Air Australia customers: 1300 131 600.
Mr Korda said he was aware of trouble with the supply of fuel before he went to bed last night.
KordaMentha was the company that 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 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 entrepreneur Michael James, whose Strategic Group also owns a charter operation in Europe.
The cancellations came a day after Qantas announced it was shedding 500 jobs due to tough business conditions.
