Air Australia Shuts Down: Fleet Grounded, 4,000 Passengers Stranded

The low-cost carrier Air Australia, based in Brisbane and formerly known as Strategic Airlines, has been placed under ‘voluntary administration’ which is similar to U.S. bankruptcy protection.

All Air Australia Flights Suspended

Bottom line: Air Australia’s fleet is grounded and 4,000 of its passengers are now stranded in destinations around the world including Hawaii, Thailand and Indonesia.

The airline’s website says flights were suspended because there are no funds available to meet operational expenses. In the site’s FAQ section is this terse exchange:

  • Q: I have a booking – what happens now?
  • A: The flight will not take place.

The site also suggests time will not improve matters: “For clarity, it also appears highly unlikely there will be any flights in the short to medium term.”

What Airline Bankruptcies Mean for Passengers

Stranded Passengers have Few Options

The Air Australia website offers passengers few options beyond telling them to make alternate travel arrangements. Apparently, the cost of the cost of the new ‘arrangements’ are to be borne by the passengers, but at least the airline provides a list of carriers with contact information that are operating in the countries these flyers are stranded in.

Best advice: Contact an alternate airline by phone, briefly explain your situation and ask them to work with you. Then contact your credit card company to remove the charge for the Air Australia flight that will not take place.

Other Airlines Gone Bust in Recent Weeks

Air Australia is not the only airline to have essentially gone out of business in recent weeks. In late January, Spain’s Spanair abruptly ceased operations, stranding about 20,000 passengers. A few days later, Hungary’s carrier Malev breathed its last, leaving more than 7,000 of its passengers in the lurch.

Exclusive: Inside an Airfare Hike – What’s Oil Got to Do with It?

One of the contributing factors in the demise of all these carriers is likely the high cost of oil. In fact, the current situation is strongly reminiscent of 2008 when the price of oil skyrocketed and a series of U.S. airlines went under, including Aloha, Skybus, ATA and more.

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Published: February 17, 2012