Air Australia could be in trouble?

[Alexander.L]

"FLEDGLING carrier Air Australia yesterday hit out at rumours that ANZ Bank is considering winding up the company amid worries from some creditors about outstanding payments." From the Australian. Could Air Australia really be in trouble?

The source:http://www.theaustralian.com.au/business/aviation/air-australia-rejects-talk-of-closure-as-creditors-fret/story-e6frg95x-1226272168836

[Rod Sloan]

On the radio this morning. Air Australia has been placed into voluntary administration as of today. Radio 2UE have been talking to a pax stranded in Phuket. Details are apparently on the Air Australia website.

[Sarah C]

Rod is correct - and yet when you go to thier website, all the 'click here for more information links' don't work.

[Sarah C]

Confirmed - in voluntary admin. All flight cancelled, 300 stuck in Phuket

[Rod Sloan]

Glad I wasn't wrong Sarah. Could have been embarrassing :D

[Radi K]

http://www.airaustralia.com/~/media/Files/Air%20Australia%20FAQs.ashx

[Andrew M]

How many people will lose their money for flights already booked

[Ryan Hothersall]

Shame anotber airline bites the dust.

Not looking good in the aviation industry at the moment, first Qantas sack staff and now this.

Will miss seeing this livery.
http://www.myaviation.net/search/photo_search.php?id=02100778

[Alexander.L]

How many people will lose their money for flights already booked

Hundreds, if not thousand I would guess!

[Andi O]

Moral of the story....NEVER pay cash to an airline. Always use Credit Cards!!

[Bernie P]

THE administrator of Air Australia has recommended that stranded passengers try to find alternative arrangements to fly home as soon as possible.
Administrator Mark Korda, of Korda Mentha, said it had been contacted early today and appointed as administrators of Air Australia after the company was unable to pay for fuel.

"Overnight the company was unable to refuel its planes in Phuket, the directors appointed us at 1.30am this morning and the boys have been working throughout the night to deal with what's a very difficult situation," Mr Korda told Fairfax Radio in Melbourne.

Up to 4000 passengers were currently overseas with Air Australia return tickets and Mr Korda advised them to try to find alternative arrangements to fly home.

"We strongly recommend that people organise their return flights sooner rather than later," he said.

He said administrators would work through the weekend to try to find a "white knight" to save the airline.

Read more: http://www.news.com.au/business/breaking-news/air-australia-couldnt-pay-for-fuel/story-e6frfkur-1226273457847#ixzz1maG3uIMk

[Andrew M]

Moral of the story, stick with major airlines really!

There were just too many rumours about Air Australia and it's cash issues to have any confidence to book with them

It's a shame :(

[Danny Rizk]

Big shame... They appeared to be expanding with a fresh new look...???

[Carsten Bauer]

YQB in PER.
Staff came into work this morning, only to be seen walking back to the staff carpark :(

[Nathan M]

Serves them right with a business plan that was that crap or even lack there of no surprise really.

[Darren Butterworth]

Most importantly, I never even got to photograph the new livery :D

[Mario Facchini]

I would love to know how so soon after being given licence to trade and fly, that they went bust !

i mean barley half a year !

[Brad M]

Shame anotber airline bites the dust.
Will miss seeing this livery.
http://www.myaviation.net/search/photo_search.php?id=02100778

yeah , such a common sight in ADL....lol

[Bernie P]

At least, the QF group are helping out stranded passengers... (as with HA)

QANTAS and Jetstar have stepped in to help hundreds of Australian travellers stranded overseas after budget airline Air Australia was placed into administration.
More than 4000 domestic and international travellers will be affected, included Australians stuck in Phuket, Thailand.

A press release given to passengers at the airport said the airline’s fleet would be grounded indefinitely and told travellers to make alternate travel arrangements.

Read more: http://www.news.com.au/travel/news/budget-airline-air-australia-placed-in-administration/story-e6frfq80-1226273367460#ixzz1manYEzfF

[Jack Melon]

Saw this coming for a while now.. so not surprised.

[Michael Cleary]

I gather that news stories over the next few days will treat us to the sight of stranded passengers demanding that the Australian Government get them home etc.

That's what Travel Insurance is for.

You feel sorry for those who operate the counters etc at airports, who are probably not actually employed by the Airline, but the ones who have to front the stranded passengers.

[StevenW]

That's what Travel Insurance is for.

A great deal of travel insurance (I'd go so far as to say most) does not include cover for an airline (or any other entity related to a customers travel) becoming insolvent, and as such would be of absolutely no use if Air Australia is insolvent.

I guess the real question is: is Air Australia insolvent or were administrators appointed to prevent that happening?

[Brock Little]

Saw this coming for a while now.. so not surprised.

Not surprised either Jack, but feel very sorry for all the staff who are now without a job, as well as the stranded passengers. :(

[Alexander.L]

I really feel Air Australia grew to quickly. I mean they didn't even focus on the domestic market they just grew internationally to rapidly.

[NeilP]

Serves them right...

You've obviously never been retrenched...

[Arthur Boy]

Just in case the staff dont see their entitlements I suggest you look at GEERS

If it comes to it, this does help....takes a while but you will see some of whats owed if your Director has screwed you as well as his customers.....

http://www.deewr.gov.au/WorkplaceRelations/Programs/EmployeeEntitlements/GEERS/Pages/default.aspx

Good luck to the hard working VC staff!!

[Robert S]

A great deal of travel insurance (I'd go so far as to say most) does not include cover for an airline (or any other entity related to a customers travel) becoming insolvent, and as such would be of absolutely no use if Air Australia is insolvent.

The travel insurance product I normally buy DOES cover insolvency (although not all the products from that provider do cover it) but I notice with interest that they specifically excluded Strategic/Air Australia from policies issued on or after 21 Dec, the date on which they wrote the exclusion into an addendum to their PDS. For what it's worth, insolvency is defined by them to include the appointment of administrators.

[Arthur T]

Sad to see Strategic gone. Could it be their low cost strategy proven fatal to them?

[David F]

I guess the real question is: is Air Australia insolvent or were administrators appointed to prevent that happening?They were unable to pay for fuel in Phuket for a flight back to Melbourne. A load of fuel can't be worth too much.

They owe the bank millions. They don't own any aircraft. Their cash reserves are so low they can't afford to refuel a plane. They must be insolvent, surely.

[Stuart Trevena]

Hi All,

Why couldn't they just allow the flights to return to Australia, and ground the airline here?
That way all the aircraft are in Australia, and NOT stuck at Foreign Ports, which is costing the Airline $$$ in Parking Fees, and then having then Ferry Empty back here at a later stage.

Stuart

[Sarah C]

Why couldn't they just allow the flights to return to Australia, and ground the airline here?


I think the fact they don't have enough money to pay for fuel might have something to do with it. The authorities in Thailand won't let them leave and rightly so.

[Andrew P]

Hi All,

Why couldn't they just allow the flights to return to Australia, and ground the airline here?
That way all the aircraft are in Australia, and NOT stuck at Foreign Ports, which is costing the Airline $$$ in Parking Fees, and then having then Ferry Empty back here at a later stage.

Stuart

but isn't the plane leased, from a Turkish company, atlasjet (http://www.atlasjet.com/AtlasjetWeb/atlasjet.kk?lang=EN)

likely the actual plane has already been reposed by the lessor and flown out to a safe port, (the lessor picking up any o/s bills in Phuket)

[Brad M]

They were unable to pay for fuel in Phuket for a flight back to Melbourne. A load of fuel can't be worth too much.

there would be more to it than one flight, pilots don't "pay at the pump".
they more than likely didn't pay an overdue fuel account, and the oil company put a halt on service..

and with no money to pay it , this is the result.

[D Chan]

it seems that they have gone downhill ever since the strategic days when the ADF charters ceased

http://www.theage.com.au/business/strategic-feeling-the-pressure-20110313-1bsy1.html

[Rowan McKeever]

Hi All,

Why couldn't they just allow the flights to return to Australia, and ground the airline here?

I think a better question is why did they dispatch the flight to HKT in the first place? They must have known there were accounts overdue and that a refusal to provide further credit was a real option. So why send a plane-load (or part thereof) out of the country just to displace THOSE people as well as those who had already left.

As someone mentioned the fact they owe banks several millions of dollars and don't own any major assets, as well as the obvious cash situation, AND the treatment of their pax throughout this situation ("find your own way home, we're not helping") suggests they are insolvent and a comeback is highly unlikely.

[Radi K]

Like StevenW mentioned - Is there a case for suggesting the company was trading whilst insolvent? If so, Michael James as sole owner could be in big trouble.

[Malcolm Parker]

Just in case the staff dont see their entitlements I suggest you look at GEERS

If it comes to it, this does help....takes a while but you will see some of whats owed if your Director has screwed you as well as his customers.....

http://www.deewr.gov.au/WorkplaceRelations/Programs/EmployeeEntitlements/GEERS/Pages/default.aspx

Good luck to the hard working VC staff!!

Unfortunately they cannot claim through GEERS until the company is placed into Liquidation. Whilst the company is in administration all the employeres can do until that time is place a complaint to the Fair work Ombudsman.

I only know myself as I am in the middle of this situation my self. With A Federal Court case being heard soon so they can forcefully place the wound up company into liquidation so i can apply through GEERS. It has been 7 months since the conpany wound up OPS.

[Mario Facchini]

but isn't the plane leased, from a Turkish company, atlasjet (http://www.atlasjet.com/AtlasjetWeb/atlasjet.kk?lang=EN)

likely the actual plane has already been reposed by the lessor and flown out to a safe port, (the lessor picking up any o/s bills in Phuket)

Atlasjet have already reposessed their Aircraft, with other companies reposessing their leased aircraft over the next week or so.

[StevenW]

They must be insolvent, surely.

Like StevenW mentioned - Is there a case for suggesting the company was trading whilst insolvent? If so, Michael James as sole owner could be in big trouble.

That's what I was getting at... were they trading/operating whilst insolvent or were the administrators brought in to try to prevent that from happening?

The travel insurance product I normally buy DOES cover insolvency (although not all the products from that provider do cover it) but I notice with interest that they specifically excluded Strategic/Air Australia from policies issued on or after 21 Dec, the date on which they wrote the exclusion into an addendum to their PDS. For what it's worth, insolvency is defined by them to include the appointment of administrators.

I think we use the same product.

The provider I use also attempts to redefine "insolvency" to include the appointment of administrators. I don't know if it's kosher for a word to be redefined to mean things that in the English language it doesn't, but I guess their legal gurus must think it is OK.

[David F]

The provider I use also attempts to redefine "insolvency" to include the appointment of administrators. I don't know if it's kosher for a word to be redefined to mean things that in the English language it doesn't, but I guess their legal gurus must think it is OK.What is the harm in extending the definition of a word? It only benefits the customer in this case.

[Bernie P]

Back in the news...

COLLAPSED budget airline Air Australia owes creditors up to 90 million dollars, and employees won't recoup all of their owed wages.

Administrators for the airline met with around 100 creditors at Brisbane's The Greek Club yesterday.

The meeting heard a federal government scheme would cover the 300 plus employees' unpaid wages, but limits payouts to 118 thousand dollars.

All up, only five million dollars of the eight million dollars owed in unpaid wages will be covered by the scheme.

Administrator KordaMentha partner Mark Korda says they've had four expressions of interest for the sale of the engineer business, but because the company leased everything there's not a lot to sell.

He expects about one million dollars to be made from sale of Air Australia's assets.
Read more: http://www.news.com.au/breaking-news/air-australia-owes-up-to-90-million/story-e6frfku0-1226285111305#ixzz1njkBmAJ8

[Mick F]

Ouch! So that leaves an $89 Million hole!

[Andrew P]

Administrators for the airline met with around 100 creditors at Brisbane's The Greek Club yesterday.

Greek Club - very appropriate place to have meeting of a company having a financial crisis

[Maikha Ly]

Greek Club - very appropriate place to have meeting of a company having a financial crisisIf this was Facebook, I'd 'Like' that reply!

More importantly, would any of the Management or board of Air Australia be facing charges in the future for this outcome?

[Nigel C]

A fire sale has begun with a bunch of airline stuff available to bid on at Grays Online. There's just under 20hrs left on the bidding.

The auction here http://www.graysonline.com/sale/7001845/boats-marine-aircraft/air-australia-strategic-ground-service-maintanance-equipment?spr=true


Need an air start cart for the old Datsun 180B? You'll find one here!
How about a ground power unit for this years Christmas lights? There's one of those available too!

The story here http://www.news.com.au/business/unique-auction-offers-unusual-treasures/story-e6frfm1i-1226317107399

[Grahame Hutchison]

I thought I might bid on 1 x pallet of headphone ear sponges (http://www.graysonline.com/lot/0122-7001845/boats-marine-and-aircraft/1-x-pallet-of-headphone-ear-sponges)And then I noticed they were used.

Some interesting items and a few bargains.