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Air Australia shuts down, cancels all flights

By John Walton     Filed under: flight cancellations, Strategic Airlines, Air Australia

Air Australia, formerly known as Strategic Airlines, has shut down after running out of cash.

All planes have been grounded and flights cancelled, leaving thousands of passengers stranded as administrators step in to take control of the airline.

The Brisbane-based airline, which launched little more than three months ago, few domestically to Brisbane, Melbourne, Perth, Derby and Port Hedland, with international flights to Denpasar, Phuket and Honolulu.

The airline warns it's unlikely to resume "any flights in the short to medium term."

"In the short term, the fleet will be grounded" according to a statement issued by Air Australia. "It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately. For clarity, it also appears highly unlikely there will be any flights in the short to medium term."

Qantas CEO Alan Joyce, quoted on Channel 7 news, promised assistance from the Red Roo and Jetstar: "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."


About John Walton

Aviation journalist and travel columnist John took his first long-haul flight when he was eight weeks old and hasn't looked back since. Well, except when facing rearwards in business class.


Have something to say? Post a comment now!

1 on 17/2/12 by Al

Hands up if you saw this coming from miles away!

1 on 17/2/12 by AirportAddict

Hear! Hear! Just been waiting for this day!

All i can say is hahahahahahaaaaaaa

They tried to get too big too soon.

1 on 17/2/12 by Al

Poor form, very poor form. I saw this coming but I am not happy in the least. Bad news for passengers stranded, bad news for passengers who paid but never even flow, bad news for airline staff, bad news for the companies which supply the airline because they have not only lost a client but probably also lost money not paid. Bad news for anybody else who might want to have a go at doing something different in the Aussie aviation sector because this will be a big disincentive. Bad news all around and nothing to laugh at.

1 on 17/2/12 by AirportAddict

Al, i do understand what the majority of people say on Ausbt. Yes i do understand where you are coming from and why you would take objection to this comment. I am sorry if i have caused any misunderstandings and will endeavor to think it out more carefully before posting comments that may cause a disagreement or a potentially large stream of comments full of needless conversation. Al, is this settled?

Moving on, what is likely to be the turnout? they say that their fleet is grounded for the short to medium term. What does everyone think will happen?

1 on 17/2/12 by Al

Thanks Airport Addict but to be honest this is not about "posting comments that may cause a disagreement or a potentially large stream of comments full of needless conversation." That's not the point. Our reaction to your post is not the point. The issue is your 'hahahahah' reaction is thoughtless and insensitive to a lot of hurt which people are going through. So dont worry about how we react to your post or the chain of comments it sets off. Think instead about how inappropriate your response to the news was in the first place.

Moving on from that as you say, what is the prognosis for Air Australia past the "short to medium term"? I reckon they're gone for good. They don't have any money right now, they can't even pay their bills to the airport and for fuel and so on, so where on earth are they going to get money from to keep flying past the medium term? Nobody in his right mind would take a stake in this airline now. So I think Air Australia is down for the count. Anybody want to buy an A330 as their private jet? Cool white and green livery, only recently given a new coat of paint.

2 on 17/2/12 by Daniell

People lose their job, travellers stranded, and you're laughing, Airport? Bad form alright. 

1 on 17/2/12 by AirportAddict

Feeling very sorry for all people who are affected by the chaos it has caused. When they first came along, we just thought, 'How long will these guys last?'... and sure enough... not long... just got the impression that they were a bit too ambitious - that is the only reason that i think it is funny they go into liquidation.  That ok?

3 on 17/2/12 by Orpheus

Airport Addict: with all due respect you should consider your comments before posting. The fact that many of us saw the writing on the wall, it doesn't mean we're laughing. There are about 300 people who lost their jobs and hundreds of passengers who are left with disrupted plans and out of pocket. I assume you are not currently working for the industry, as if you were you would have shown more respect and empathy for the people affected. In summary, your comment does not make you look like a visionary or even mildly amusing. It makes you look like the insensitive moron that you probably are.


4 on 17/2/12 by akhosla

My colleague and his family were due to fly out with them tomorrow for a long awaited holiday. Until yesterday afternoon he was getting calls from their call centre asking if he wanted to pay addtional $$ per ticket to guarantee they were all seated together!It is never nice to see a company go into adminstration but this type of behaviour is fradulent. Surly their management knew yesterday about their dire financial situation, how come they did not instruct their staff to stop trying to squeeze additional revenue from booked passengers!

And have no hope from this adminstrator Korda Mentha, they will ensure this airline never flies again - after all their interest is to drag this process as long as possible to ensure maximum hours they can bill for their fees. We were one of the creditors for Ansett, Korda Mentha made sure that we never saw 1 cent of our dues.



5 on 17/2/12 by Libertyscott

I'm not laughing, I'm astonished there are still businesspeople who can get work or banks to lend to them for such follies.  What is wrong with people who think they can set up such a capital intensive business with enormous operating costs and long lead times without the capital behind it to last at least 3-4 years without turning a profit?

This was a no-brainer.  The creditors were just plain stupid, but sadly a lot of employees were taken along with it and customers are affected too.  It appears that the glamour and allure of having an airline still dazzles the eyes and befuddles the minds of some that it takes away all business sense.

6 on 18/2/12 by Noob

All the best for the staff and their families.


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