Air Australia goes bust with 300 jobs lost

17 Feb 2012, 11:45 am   -   Source: AAP
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Most of Air Australia's 300 staff members have been stood down immediately, the voluntary administrator says.

About 300 people have lost their jobs after budget carrier Air Australia was placed in administration.

The Brisbane-based budget carrier was placed into voluntary administration on Friday, immediately grounding all flights and stranding up to 4000 passengers overseas.

A spokesman for voluntary administrator Korda Mentha told AAP the airline employed 300 staff.

"Most have these have been stood down immediately," the spokesman said.

A few staff members have been kept on temporarily to assist the airline throughout the administration process.

The announcement comes a day after national carrier Qantas announced an 83 per cent fall in profits and the loss of 500 jobs because of tough business conditions.

Qantas CEO Alan Joyce said Qantas and Jetstar would try and fly Air Australia passengers home, with about 4000 passengers abroad with return Air Australia tickets.

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.

Hawaiian Airlines said it would offer special one-way rescue fares for stranded Air Australia travellers in Australia and Hawaii.

Tickets will be available at a cost of $US300 from Honolulu and $AUD300 from Sydney until March 1, Hawaiian Airlines CEO Mark Dunkerley said in a statement.

Travellers booking the fare must present their Air Australia ticket or itinerary information when checking in.

"We're offering this special fare to help our friends from Australia return home and not let this unfortunate circumstance tarnish their vacation in Hawaii," Mr Dunkerley said.

"We also want to help any Hawaii residents stranded in Australia to get home."

Hawaiian Airlines offers daily flights between Honolulu and Sydney on its Boeing 767 aircraft seating up to 264 passengers.

The pilots' union said the airline had failed to consult with it or the pilots before entering administration.

"Obviously this is bad news for our members at Air Australia," Australian Federation of Air Pilots (AFAP) President, Captain Bryan Murray, said, adding he was "saddened and disappointed" at the announcement.

"It is regrettable that the company did not consult with the union or the pilot body prior to this drastic step being taken."

The union said it would be contacting the voluntary administrator to ensure its members received all their entitlements.

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