Budget airline Air Australia placed in administration

HUNDREDS of Australian travellers are stranded in Thailand after budget airline Air Australia was placed into administration.

A press release given to passengers at the airport said the airline’s fleet would be grounded indefinitely.

"In the short term, the fleet will be grounded. It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately," it said.

"For clarity, it also appears highly unlikely there will be any flights in the short to medium term.

"You should make alternate travel arrangements."

The press release listed details for other airlines flying to Australia.

It said passengers who booked using credit cards may be able to receive a refund by asking for a charge back from their bank.

Those who paid cash were unlikely to receive a refund.

"Unfortunately if you paid by cash, it is likely you will not be entitled to a refund unless you took out insurance AND that insurance covers an event of insolvency," it said.

Honeymooners Michael and Tiffany Ilyine are among those stranded in Phuket after their flight was cancelled overnight.

Mr Ilyine, from Geelong, said the couple had been due to fly out at 7.30pm Phuket time after their 10-day honeymoon in Koh Samui.

The couple had checked in to their flight and their bags were loaded onto the plane but they were never able to board.

Mr Ilyine said the plane's departure was delayed a number of times before passengers were handed a press release from receivers KordaMentha after midnight.

There were no Air Australia staff in the terminal to speak to passengers.

"The information from the airline is that there would be no assistance," Mr Ilyine said.

"There was no communication from them at all, there were no ground staff and air staff said that they refused to answer the phones and weren’t able to be contacted.

"There's a plane-load of mainly Australians who have been dispersed from the airport with nothing really apart from a press release."

The couple managed to book accommodation five minutes from the airport and was trying desperately to find flights home on other airlines.

Mr Ilyine said most of the flights were booking out fast as passengers scrambled to get home.

A Jetstar spokesman said it was working to see what it could do to help stranded Air Australia passengers in Phuket.

Consular officials are speaking with local authorities to help stranded Australians, a Department of Foreign Affairs and Trade statement said.

"Travellers should get in touch with their tour operator and/or insurance company," it said.

"If you are unable to contact them, you should call the Department of Foreign Affairs and Trade's 24-hour Consular Emergency Centre on +61 2 6261 3305.

"Our Embassy will continue to remain in close contact with local authorities on the latest situation."

It urged anyone worried about family or friends in Phukey to try and contact them directly first.

"If you are unable to contact them and still hold concerns for their welfare, you should call the Department of Foreign Affairs and Trade’s 24-hour Consular Emergency Centre on within Australia on 1300 555 135 or if overseas on +61 2 6261 3305."

The company posted a statement on its website this morning.

"On February 17 2012, the Director of the Air Australia group of companies appointed John Park and Mark Korda of KordaMentha as voluntary administrators," it said.

The Brisbane-based carrier flew domestic routes and to Bali, Honolulu and Phuket.

It was previously known as Strategic Airlines but relaunched in November 2011 as Air Australia with a view to cash in on under-serviced routes.

Chief executive Michael James said during the relaunch that he would not be attempting to compete with Qantas or Jetstar.

"I think it is re-educating Australia that you don't have to go via Sydney anymore," he told reporters at the time.

The announcement comes a day after Qantas announced it was shedding 500 jobs due to tough business conditions.

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