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Air Australia grounds Hawaii flights, hundreds stranded

    Jon Gray sits on the floor near the Air Australia ticket counter at Honolulu International Airport, stranded for the time being after Air Australia canceled its late morning flight to Brisbane. He and fellow passengers trying to determine their next course of action.
    An Air Australia aircraft sits in a hangar in this undated courtesy photo.

Air Australia has been placed into a form of bankruptcy due to financial difficulties, and has grounded all flights to Hawaii and other destinations served by the startup carrier.

The airline began twice-weekly flights to Honolulu in December from both Brisbane and Melbourne.

Dan Meisenzahl, spokesman for the state Department of Transportation, said 225 Air Australia passengers were due to leave Honolulu for Brisbane at 11:40 this morning. The passengers had made it through security before they found out the flight was grounded, Meisenzahl said. A flight with 153 aboard arrived earlier in the day from Melbourne.

"It’s a fluid situation," he said, adding that Air Australia has hired a ground operator to help the stranded passengers.

Hawaiian Airlines is offering a $300 one-way fare for stranded Air Australia customers who now need passage home. The Hawaiian flight will be to and from Sydney only.

Reservations will be available at Hawaiian Airlines’ call center (800) 367-5320 or at the Honolulu Airport beginning at 3 p.m. today. Passengers booking the fare will be asked to show their Air Australia ticket or itinerary when checking in. 


The Brisbane-based international and domestic airline said all flights had been canceled and the airline would not be accepting new bookings because it could no longer pay its bills. Voluntary administration in Australia is similar to bankruptcy protection in the U.S., and can buy a company time to trade out of its financial problems.

“It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately,” the airline said in a statement.

Around 4,000 passengers were overseas with Air Australia round-trip tickets, voluntary administrator Mark Korda said. Some of those affected were stranded in Honolulu and Phuket, Thailand.

“Overnight, the company was unable to refuel its planes in Phuket,” Korda told Australia’s Fairfax Radio. “The directors appointed us at 1:30 this morning and the boys have been working throughout the night to deal with what’s a very difficult situation.”

In a statement, Korda said the administrators were calling for immediate expressions of interest in the sale of the business.

Passengers who bought tickets with credit cards or had travel insurance may be given a refund, the airline said.

The airline’s fleet consists of five Airbus A330-200 and A320-200 aircraft, and regularly flies to Bali, Phuket, Honolulu and cities within Australia. 


Qantas Airways Ltd., Australia’s biggest carrier, may put additional aircraft on routes to Phuket and Honolulu to help stranded passengers, Chief Executive Officer Alan Joyce told Sky Television today.

Air Australia re-branded itself in November after starting out in September 2009 as Strategic Airlines. The twice-weekly flights that Air Australia launched in December to Hawaii from both Brisbane and Melbourne represented the carrier’s first foray to the United States. Air Australia said at the time it would expand the Brisbane and Melbourne routes to Honolulu to three times a week in March.

"We believe Hawaii is poised to enjoy a huge resurgence of visitor interest from Australia with more direct access and the favorable exchange rate, Michael James, group managing director and CEO of Air Australia said in December.

Bloomberg News contributed to this story.  




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