Air Australia passed audit before 4000 left stranded

February 19, 2012 by Victor

Qantas, Jetstar, Virgin Australia and Hawaiian Airlines offer deals.


Passengers who booked through a travel agent will find their losses are not covered by the travel industry's compensation fund. It only covers losses when a travel agent, not an airline, folds.

Passengers with tickets should contact their travel agent and check insurance policies, said Flight Centre spokesman Haydn Long.

Insolvency firm co-founder Mark Korda said the airline's financial shortfall was likely to run into the ''tens of millions'' of dollars. ''The prognosis for a sale as a going concern is not good,'' he said.

The Civil Aviation Safety Authority had the company submit its books to check if it had sufficient resources to meet safety requirements, sources told The Saturday Age.

But the audit, concluded in January, found that while the company was precariously balanced with poorly rated finances, there was no evidence of cutbacks in safety. CASA therefore did not suspend its licence. Indeed, the watchdog had reissued its licence on November 17 last year.

CASA spokesman Peter Gibson said it was not the watchdog's role to ensure an airline's financial viability beyond any impact on safety.

Mr Korda said the call ''came out of the blue'' early yesterday when the airline was unable to pay for fuel for a flight back from Phuket, Thailand.

Upon KordaMentha's appointment, it grounded the airline - affecting flights to Phuket, Bali and Honolulu, and Melbourne, Brisbane, Perth, Port Hedland and Derby.

Bookings made by credit card might be covered under the card issuer's terms, the Australian Competition and Consumer Commission said.

Passenger Yves Makhoul was to fly back to Melbourne on the Phuket flight on Thursday. ''At about 8pm, people saw the pilot and stewards leaving on a different plane,'' he said.

He said it wasn't until Thai authorities told them to leave the airport that they knew their flight was not taking off.

Another passenger, Harry Hansen, emailed The Saturday Age to say his two daughters, aged nine and 11, were stranded in Hawaii, and that while Air Australia had ''facilitated unaccompanied minors travelling to Hawaii … other airlines would not accept them as passengers because they are too young''.


<<Go Back