17 Feb 2012

Thousands stranded in Australian budget airline collapse

6:34 pm on 17 February 2012

Administrators are trying to save an Australian budget airline which has collapsed leaving thousands of passengers stranded.

Air Australia was placed in administration in the early hours of Friday morning when it could not pay for fuel at an airport in Thailand.

The administrators have grounded the airline, affecting 4000 passengers in Australia, Thailand, Bali and Hawai'i.

Some 300 jobs could be lost, the ABC reports.

Administrator Mark Korda of KordaMentha says passengers and staff are the first priority.

He says the next priority will be to see if there's a "white knight", or if the airline can be sold as a going concern.

Aviation writer Gerard Frawley says there had been rumours within the industry for some time about the airline's ability to pay its bills.

Qantas and Jetstar are offering to fly stranded passengers back to Australia for the same price as the Air Australia fare.