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wilco737
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Air Australia Suspended All Flights

Thu Feb 16, 2012 7:37 pm

Just read it on the internet.

http://www.heraldsun.com.au/travel/n...ation/story-fn32891l-1226273367460

Looks like another airline gone? Or will it only be for a period of time?

wilco737
  
 
T8KE0FF
Posts: 292
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 7:41 pm

What an awful shame! It looked like something new and fresh to enter the Australian aviation market, but I guess Australia isn't really the best place to establish a new LCC in this economic climate; not a lot of people for such a large country, cities are usually far apart (meaning more fuel used). Saying that, Tiger has slowly established themselves pretty well - despite their awful customer service.

With QF cutting 500 jobs too, it's not really a great day down under.
RJ85 E145 E195 A319 A320 A321 A330 A340 A380 B737 B747 B757 B767 B777 B787 DH4 AT72
 
GIANCAVIA
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 7:47 pm

Amazes me how quick airlines can fail.
 
Bluebird191
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 8:29 pm

Quoting T8KE0FF (Reply 1):

What an awful shame! It looked like something new and fresh to enter the Australian aviation market, but I guess Australia isn't really the best place to establish a new LCC in this economic climate; not a lot of people for such a large country, cities are usually far apart (meaning more fuel used). Saying that, Tiger has slowly established themselves pretty well - despite their awful customer service.

VC aren't exactly new - they've been around in various forms for a number of years, initially as Strategic Aviation, which concentrated fairly much solely on flying Australian troops to the Middle East as they had the defence contract then. Then when they lost their contract with the Defence Department they shifted focus into the passenger market and started offering flights to the general public as Strategic Airlines, who then rebranded only a few months back to Air Australia.

Also, VC havent always been a LCC either - Strategic was a full service carrier, but with the rebranding to Air Australia they morphed into a LCC. It wouldnt surprise me if they didnt adjust their costs to relfect their LCC status.

Wherever they got ideas for some of their routes I have no idea - like BNE-GLT on an A320 and BNE-TSV-DPS. Both bled the cash, but the BNE-TSV route really needed to be atleast daily to have any effect on that market.

Lately with going long haul with the A332, this shows the case that LCC for long haul doesnt work. BNE and MEL to HKT and HNL, but who knows how JQ and D7 are managing to make a profit on their long hauls.

In any case, I do really feel for the staff here - one of the guys here worked for Strategic (not sure if he does anymore as we lost contact, not sure why) but he may be able to shed more light on this.

All the best to the Air Australia staff in finding new jobs.
 
tayser
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 8:47 pm

KordaMentha info from the Air Australia site: http://www.airaustralia.com/~/media/Files/Air%20Australia%20FAQs.ashx
 
sandyb123
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 9:41 pm

Quoting T8KE0FF (Reply 1):
I guess Australia isn't really the best place to establish a new LCC in this economic climate

Actually Australia is the only country in the western world to almost avoid any recession.

Sandyb123
Member of the mile high club
 
Ozair
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 9:51 pm

Quoting Bluebird191 (Reply 3):
initially as Strategic Aviation, which concentrated fairly much solely on flying Australian troops to the Middle East as they had the defence contract then. Then when they lost their contract with the Defence Department

I was surprised once they lost the contract that they even continued on. Some of their expansion plans were already in place while they were still flying the troop transfers and the loss of the contract was a very big surprise to the airline.

Quoting Bluebird191 (Reply 3):

Lately with going long haul with the A332, this shows the case that LCC for long haul doesnt work.

I don't think you can count VC as an long haul LCC entrant. It always appeared like a charter airline with scheduled service.
 
ThunderB
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 10:16 pm

Strategic has been under the spotlight for not paying bills for a long time. Their Airbus contract for services werent being paid for the last 6 months. There oldest A320 was in the process of reposession by the lessors, the company apparently chose not to pay the bills on it as it was coming to the end of its lease. That kind of behaviour from an organisation with out any foundation is going to fail. It didnt collapse due to it being a LCC, Full Service, or that the market that caused its downfall, it was the management operationally making moves that were not the best for the group. They were debt laden from their european ventures and AOC cancellation, so it was bound to catch up. Pity the employees and the passengers who have been treated like pawns in a game due to the flipant behaviour from the owner.
 
HNLPointShoot
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 10:20 pm

HA is offering stranded passengers in Hawaii seats to SYD for $300.

Honolulu Star-Advertiser article
 
ha763
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 10:20 pm

So, I guess the VC A332 that came in today from MEL will be one of the or the last flight? It is on the flight board scheduled to go out tomorrow morning, Feb 17 (it is still the 16th here at HNL). Would it carry pax or ferry back? Or will it be stuck here for awhile?
 
sandyb123
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 10:45 pm

Quoting ha763 (Reply 9):
Would it carry pax or ferry back? Or will it be stuck here for awhile?

It'll probably be stuck there for a while. The aircraft will probably not be insured and nobody will fuel it. HNL airport might also be looking for landing fees.

I assume their A330s are lease financed? If so then the they will go back to their owners after the liquidation. That can take some time.

Like we saw with MA, once the airline starts to fold it's a spiralling decent and everyone moves in to protect themselves.

Sandyb123
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gilesdavies
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 10:53 pm

Does anyone know if Air Australia were due to operate UK charters this summer to the usual Mediterranean hot spots?

Just curious as they had quite an extensive program last year, but were at the time trading under the name of Strategic Air, before the rebrand.
 
cc2314
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 10:59 pm

Quoting sandyb123 (Reply 5):

Add Norway to the list
Deleted
 
MAN23R
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RE: Air Australia Suspended All Flights

Thu Feb 16, 2012 11:01 pm

Strategic Aviation (Based in LUX) are planning UK charters flights like last year, commencing in May. Hopefully this news wont have an affect on the situation as both airlines have separate Operating Licenses, but time will tell...

[Edited 2012-02-16 15:05:36]
 
koruman
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 1:14 am

I suggested in an earlier thread that the BNE-HNL and MEL-HNL routes would end up being picked up by Hawaiian (or Virgin, or even Air NZ) if they succeeded under Air Australia.

Air Australia was badly managed and was never going to work. The Hawaii and Phuket routes in particular are of such long range that it was going to require the support of strong frequent flyer program for passengers to put their hands in their pockets to buy the Business Class seats.

Even Hawaiian would probably struggle, as their FF program is superfluous in Australia, and their partner Virgin Australia chooses not to issue Status Credits for seats sold on HA with either HA or VA code.

I think there is an underlying conclusion to be drawn here about leisure travel from Australia, as follows:

1) Bali and Fiji can work on all-economy A320s and 737s.

2) Honolulu can work with two class service (and possibly 3 class, allowing for Premium Economy), because there are enough higher-demographic passengers.

3) Phuket is a major problem, because only widebody aircraft like the 767 and A330 have enough range to get there from Eastern Australia, but they all seem to have Business cabins - and there is minimal Business Class demand. Both Air Australia and V Australia have had to withdraw.
 
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ColAvionLover
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 2:24 am

Seems like yesterday when we posted on Facebook the first photo of their A320...

Quoting Giancavia (Reply 2):
Amazes me how quick airlines can fail.

Indeed  
JDM's
 
Lufthansa
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 2:46 am

I have been looking at this very very closely, as somebody very close to me just lost their job as a result of this. I think we can sum the problem up to be undercapitalisation. The owner in this case I suspect thought of the airline as 'part of him' as many small business people tend to. It really needed the backing of somebody with deeper pockets.

If you look at the long range flights they were all basically going out full at reasonable level fares. The company were minimally staffed and their costs should have been reasonably good. But like most small businesses, Cash is King. At times you have huge outgoings, but even though you're expecting the cash to come in you might not have it all on had when you need it. Being a low margin business, and of course in the current global environment banks don't like to hand out huge overdrafts. That means you need either a bigger airline or a bigger group behind you to secure that kind of operating cash needed to keep things going in the period between incurring expenses and getting the cash. otherwise a single thing can undo the entire operation... such as an oil company refusing to refuel.

My guess is this is exactly what has happened here. The same thing has happened to charter airlines in europe in the past, when better backed ones have been able to set in with basically the exact same aircraft and charge the exact same prices and make it work. Let's hope and pray they find a white knight. But it's unlikely. The irony is yesterdays rumors in the media may have been the exact thing that caused the refuellers to refuse supply last night in phuket. Fingers crossed somebody likes there assets (route authorities, a mining contract, a few a330s coming) but I am not holding my breath.

I wonder if jetstar would make a bid? It would fit perfectly in to their fleet (with a few small amounts of maintenance outsourcing) and they could roll over the older A320s as new ones come online. They've ordered a truckload of them after all.
 
qf002
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 3:42 am

Quoting Lufthansa (Reply 16):
It really needed the backing of somebody with deeper pockets.

I agree. The issue was that they had massive outgoings, and were unable to bring money in quickly enough (purely because of their business model) to cover them. Perhaps choosing to fly to slightly higher yielding destinations at launch (I'm thinking Asia) might have avoided this situation?

Quoting Lufthansa (Reply 16):
I wonder if jetstar would make a bid?

I could see QF making a bid, but not JQ (it's not really the style of the group). The A320's could go to JQ and the A330's could be used for domestic, or international ops (with a refit).
 
Lufthansa
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 3:46 am

Quoting qf002 (Reply 17):
I could see QF making a bid, but not JQ (it's not really the style of the group). The A320's could go to JQ and the A330's could be used for domestic, or international ops (with a refit).

well even the existing destinations would fit in with JQ, and lets not forget VC holds the majority of Australia - Indonesia traffic rights. Plus more HKT flights. I would have said vietnam too but that hasn't gone so well for Jetstar so they might wanna miss that one but the china flights could work. if JQ linked BNE and MEL to shanghai a few times a week, or perhaps did a MEL india using VC it would work. However I think Virgin should make a bid. it would be a way for them to get the traffic rights that previously probably were jetstars for the taking plus they have arrangements for 6 A330s to come online in place and DJ could well use them.
 
mal787
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 3:52 am

While i feel sorry for the staff and the stranded passengers as a result of this collapose. I wonder how many people who are now stuck, snubbed QF & JQ due to the issues QF have had lately and the talk that JQ is average in inflight service. And are now waiting for QF & JQ to bring them home,

mal787
BN2 Metro, 402,404, Conquest, king air, 707,727.200, 732,733,734,735,736,738,757,762,763,742,743,744, MD11, DC9,Westwind
 
Lufthansa
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 4:37 am

Quoting mal787 (Reply 19):
And are now waiting for QF & JQ to bring them home

Well VC took put on extra flights to take on QF stranded PAX during the grounding. nature of the beast I suppose.
 
nethkt
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 5:09 am

So sad they are not going to bring more Aussies to Phuket anymore  
We lost Virgin Australia (V aussie back then) and now Air Australia?
Only JQ from SYD and DJ from PER now?  
Let's just blame it on yields.
 
avroarrow
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 5:47 am

Pity, their livery was pretty sharp IMHO.

View Large View Medium
Click here for bigger photo!

Photo © Mehdi Nazarinia - Mehdi Photos


But of course thats no excuse for dodgy business practices.
Give me a mile of road and I can take you a mile. Give me a mile of runway and I can show you the world.
 
weebie
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 6:34 am

Air Australia is a victim of an Australian Government where businesses are screwed. The Carbon tax would of killed off this airline anyway. If it wasn't for the mining boom Australia would be joining the ranks of Britain, USA and Western Europe as "Screwed" economies.
 
alangirvan
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 6:53 am

One of the planes is operated by Atlasjet of Turkey. I wonder if Atlasjet has been paid for their services, or are they just another creditor? Is their plane stranded at Phuket - are they allowed to fly it home? This was a problem for Monarch when Compass folded, and Monarch were not allowed to fly their plane out of Australia until debts to various Australian Government organisations had been settled.
 
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Mikey86
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 12:13 pm

Quoting weebie (Reply 23):
Air Australia is a victim of an Australian Government where businesses are screwed. The Carbon tax would of killed off this airline anyway. If it wasn't for the mining boom Australia would be joining the ranks of Britain, USA and Western Europe as "Screwed" economies.

I wonder what the cause for them to run out of cash, I'm not sure what cost made them lose money but I am sure the carbon tax wasnt the only thing. Does anyone have this info?
mikey86 - Greenslopes, Queensland
 
qf002
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 12:34 pm

Quoting Mikey86 (Reply 25):
I wonder what the cause for them to run out of cash, I'm not sure what cost made them lose money but I am sure the carbon tax wasnt the only thing. Does anyone have this info?

Carbon tax had no impact -- it isn't yet in place in Australia.

The costs -- massive rebranding/relaunch, acquisition of new aircraft/leases, loss-making domestic routes, major service disruptions (ie the aircraft issues in HKT which supposedly cost them quite a lot of money), fuel costs etc.
 
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9MMPQ
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 12:39 pm

Sorry to see them go but that's the nature of our business i suppose. Reading everything in the media it seems this was a case of things just waiting to happen perhaps ? All the best to it's stranded passengers & staff who will be out of a job.

It does surprise me though how poorly everything seems to have been communicated last minute to staff & passenger on immediately affected flights. Word i'm getting from friends in HKT does not paint a pretty picture at all.

To think i had almost booked with them for my upcoming holiday.
I believe in coincidences. Coincidences happen every day. But I don't trust coincidences.
 
RubberJungle
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 2:29 pm

Under-capitalisation is probably the number one killer of start-up airlines. You really need some heavy money behind you to crawl through the first few years.
 
HDA212
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 3:11 pm

I believe a lot of the employee themselves saw it coming as well... Strategic/Air Australia wasn't in very good shape when they lost the ADF contract, so this really doesn't come as a surprise to a lot of people
 
rj777
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 3:14 pm

What exactly does "going into administration" mean? Is that the Aussie equivalent of Ch. 7?
 
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jetfuel
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 3:27 pm

Quoting rj777 (Reply 30):
What exactly does "going into administration" mean? Is that the Aussie equivalent of Ch. 7?

Yes basically the same. The administrator becomes the liquidator and sell off what assets there are and pays debts. To be honest I dont think there are any assets in this case,. They didn't own anything really..
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
 
Scanorama
Posts: 148
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 4:42 pm

Is administration closer to Chapter 11, a step closer to liquidation but not quite there yet? The next step could potentially be liquidation but there is still a way out (not strictly applies to Air Australia but generally speaking).
 
brucek
Posts: 218
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 6:43 pm

Quoting sandyb123 (Reply 5):
Actually Australia is the only country in the western world to almost avoid any recession

Yes- I have just returned to the US from being in the Melbourne area, used to live there once in a prior life... while there have been recessionary impacts in the past, in recent times you are correct- but I'm sure there's a lot more to an airline failing fiscally than the local economy. And the damage (IMO) from the 2008 recession in the US that has spread to most countries is far from over.
 
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9MMPQ
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 8:29 pm

Quoting scanorama (Reply 32):
Is administration closer to Chapter 11, a step closer to liquidation but not quite there yet?

Hardly the same.

Those under Chapter 11 are offered protection from their creditors. The airline then has time to work out it's own problems by themselves for as long as the court will allow the airline to stay in Chapter 11.

Under administration the airline effectively falls under the administrator who is working for the creditors. The airline no longer has things under it's own control. It then becomes a question of working out what will benefit the creditors the most. Obviously survival of the airline is not likely to be it's primary concern.
I believe in coincidences. Coincidences happen every day. But I don't trust coincidences.
 
eaglefarm4
Posts: 447
Joined: Sun Jul 17, 2011 10:33 pm

RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 9:07 pm

Quoting koruman (Reply 14):
I suggested in an earlier thread that the BNE-HNL and MEL-HNL routes would end up being picked up by Hawaiian (or Virgin, or even Air NZ) if they succeeded under Air Australia.

Hawaiian eyes second port.Hawaiian Airlines will explore the possibility of operating to a second Australian gateway should it's expanding Sydney operation perform well.


President and chief executive Mark Dunkerley told Travel Today that a new Australian route has previously appeared on a list of potential new route destinations without ever being on the verge of being launched.But it could be back on the radar,he said.

“We would certainly look at a new gateway but key to that is how well the new frequencies and larger aircraft are received in Sydney.

“Australia is an important destination for Hawaiian.I would hope to launch into a new Australian gateway.

In May – “possibly sooner”, said Dunkerley the carrier will then replace the 264 seater B767 with 294 seater A330'S.


A move that will increase capacity by a further 11%
tourismman
 
cam747
Posts: 68
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RE: Air Australia Suspended All Flights

Fri Feb 17, 2012 11:51 pm

Quoting weebie (Reply 23):

Air Australia is a victim of an Australian Government where businesses are screwed. The Carbon tax would of killed off this airline anyway. If it wasn't for the mining boom Australia would be joining the ranks of Britain, USA and Western Europe as "Screwed" economies.

That is a ridiculous rant with no basis for what has occurred at AirAustralia at all.

This somewhat sensationalised article in news ltd suggests the company's failure is a result of management's profligacy, and nothing else.

http://www.news.com.au/travel/egos-c...-life/story-e6frfq7r-1226274402506
 
avroarrow
Posts: 804
Joined: Wed Sep 19, 2001 10:40 am

RE: Air Australia Suspended All Flights

Sat Feb 18, 2012 1:36 am

Profligacy.....I like that word.  
Give me a mile of road and I can take you a mile. Give me a mile of runway and I can show you the world.
 
Bobloblaw
Posts: 2406
Joined: Fri Jan 13, 2012 1:15 pm

RE: Air Australia Suspended All Flights

Sat Feb 18, 2012 3:56 pm

Quoting sandyb123 (Reply 5):
Actually Australia is the only country in the western world to almost avoid any recession.

not only that. Australia hasnt had a recession since 1993.

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