4,000 Passengers Stranded as Air Australia Collapses

Qantas and Virgin Australia have both stepped in to help fly over 4,000 stranded passengers to their destinations after Air Australia grounded its five jets suddenly, after running out of money to refuel its aircraft.

The Brisbane-based airline is trying to find last minute assistance to help save both the airline and 300 employees from losing their jobs.

Qantas chief executive Alan Joyce said both Qantas and Jetstar would fly stranded passengers home while Virgin Australia said it would assist Air Australia passengers who’ve been stranded in Denpasar in Indonesia get to Brisbane, Sydney or Melbourne.

As well as the 4,000 who have been marooned at airports (it could take days to get passengers home or to their onward destinations) Flight Centre in Australia says there could be up to 10,000 customers with future bookings who will be affected.

At its glamorous relaunch last year, Air Australia was poised to be the new low cost alternative for passengers heading to Thailand and Hawaii. Administrators are probing the possibility that the airline was trading while insolvent. Previously known as Strategic Air, the airline rebranded as Air Australia late last year.

The administrators handling the crisis have confirmed that passengers who paid by credit card or took out travel insurance are likely to get refunds, but anyone who paid in cash looks unlikely to recoup their money because Air Australia has no cash to issue refunds.

"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," said a statement.

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