Australia - Aviation industry 'needs to be examined'

There are calls for the Australian aviation industry to be investigated after budget carrier Air Australia went into administration.

The Brisbane-based airline was placed in voluntary administration on Friday, grounding all flights and stranding up to 4000 passengers overseas.

Transport Workers Union (TWU) national secretary, Tony Sheldon, said the airline previously held contracts with successive federal governments and was supposed to be open about its performance.

'It does say something about ... the fact the aviation industry should be properly investigated in this country,' Mr Sheldon told reporters in Sydney on Friday.

'There is an obligation to ensure if a company is flying into our air space that they're profitable and able to operate.'

A spokesman for voluntary administrator Korda Mentha told AAP the airline employed 300 staff, most of whom would be stood down immediately.

The Australian Federation of Air Pilots (AFAP) expressed its disappointment at the announcement, saying 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,' AFAP President, Captain Bryan Murray, said in a statement.

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

Mr Sheldon called on the federal government to assist the stranded travellers in getting back home, but Prime Minister Julia Gillard said Air Australia should be doing all it could to assist its passengers.

'I want to say to the administrators they need to do everything they can to ensure that these people who have been passengers with this airline get back home,' Ms Gillard said.

'I do understand that Qantas and Jetstar are stepping up with some additional seats to help people get back home.

'But I do want to see maximum support for those Australians who have been stranded ... and of course we want to see (Air Australia) deal with their workforce properly.'

Qantas CEO Alan Joyce on Friday said both Qantas and Jetstar would fly stranded passengers home, with Qantas looking at putting on supplementary services.

'If the (Air Australia) passengers come to a Qantas desk, a Jetstar desk, show their ticket, we'll give them a ticket for the same value they've paid with Air Australia,' Mr Joyce said.

Meanwhile, Virgin Australia said it would assist Air Australia passengers stranded in Denpasar in Indonesia, with US$199 fares from Denpasar to Brisbane, Sydney or Melbourne.

And the Insurance Council of Australia (ICA) has urged all travellers affected by the airline's grounding to contact their travel insurer as soon as possible.

'Travel insurance is meant to compensate policyholders for financial losses they may incur in unforseen and unexpected circumstances. However, each insurer has different terms and conditions,' ICA CEO Rob Whelan said in a statement.

Some insurers exclude the collapse of travel service providers from policies, while about 10 per cent of Australians neglected to take out travel insurance before they left the country, he said.

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