What To Do Now Air Australia Has Gone Bust

Proof that cheap flying can be a risky business: Air Australia (formerly Strategic Airlines) has gone into receivership, leaving Australians with now-useless return tickets scrambling for alternative arrangements. What are the options for passengers stuck in those locations?

Air Australia appointed voluntary receivers this morning, but in practical terms it doesn’t look like the airline, which operated bargain flights to Thailand, Indonesia and Hawaii, will be flying again. Passengers halfway through a ticket with Air Australia will have to try and book seats on other carriers.

People stuck in those locations might be there for a while; reports suggest flights on alternate carriers are already booked out for a fortnight or more. Qantas is offering credit to the value of unused tickets on Jetstar and Qantas services and a set of special fares, but making up the difference could still leave affected passengers out of pocket. Passengers with travel insurance should be able to get those costs back from their provider (though some insurers have refused to cover Air Australia flights in the recent past).

Passengers who booked on credit cards should be able to claim back the costs through chargeback schemes (the FAQ on the airline’s site includes contact details for the major card issuers). Passenger who paid cash are, unfortunately, not going to see anything, since they’ll rank a long way down the list of creditors seeking whatever can be extracted from the airline.

One of Air Australia’s main marketing tactics was offering discount tickets via group deal sites. Its collapse is a reminder that all air travel carries risks, a point that was underlined by Tiger’s extended shutdown last year. While top-tier carriers like Qantas and Virgin might seem less risky, nothing is certain; Qantas chose to ground itself down last year in response to an industrial dispute and Virgin went out of operation for several days due to a computer glitch in 2010.