Phuket budget airline goes to the wall

20 Feb 2012

Passengers heading back to Australia last week were left stranded at Phuket Airport when their airline went bust. Air Australia failed on Friday and airline industry insiders estimated that around 4,000 of its passengers had been left stranded in locations such as Phuket and Honolulu.

The budget carrier was forced to cancel a Phuket to Melbourne flight when the Phuket supply company refused to authorise any fuel for it. A Honolulu to Melbourne international flight and five Brisbane-Melbourne domestic flights were also grounded.   

The airline’s collapse took place so quickly that some passengers at Phuket Airport were able to check in for their flights and see luggage loaded, but were unable to actually board the aeroplane.

Air Australia administrators KordaMentha said there was no money to pay for operating expenses and therefore flight services had been suspended indefinitely. The administrators advised passengers to arrange alternate flights back to Australia and, for those who had future bookings with the airline, to make other arrangements.  

KordaMentha boss Mark Korda said it was too early to tell whether the airline could be saved. He added that people who had paid for their tickets by credit card or taken out insurance would probably get refunds, whereas those who had paid cash could probably wave goodbye to their money as the carrier had no funds available for compensation.

Australian national carrier Qantas and its subsidiary Jetstar stepped in over the weekend and offered special fares to enable marooned travellers to complete their journeys. Mr Korda added that 300 Air Australia employees had also been placed in limbo when the carrier collapsed. 

Tags: airline to the wall

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