Air Australia shutdown will cost Hawaii business

By Howard Dicus

HONOLULU (HawaiiNewsNow) - When Hawaii hoteliers are done accommodating Australian visitors stranded by the collapse of Air Australia, they'll have to deal with other visitors who booked rooms but won't be coming now.

Hundreds, possibly thousands, of future Air Australia fliers now can't get to Hawaii unless they buy a fresh round of tickets on Qantas Airways, Jetstar, or Hawaiian Airlines, at prices which are generally higher than what Air Australia was charging.

Some are expected to cancel their travel plans altogether, either because of lack of finances or out of frustration with what happened, leaving hotels with empty rooms they thought had sold.

An estimated 100,000 Australian booked tickets on flights that will never take off, including the hundreds who got to Hawaii before the Thursday shutdown. Many are proceeding with their intended vacations this week while making alternative arrangements to return home later.

About 50 people who were in Honolulu when the airline shut down Thursday were able to fly Qantas home Friday, including one man, John Moran, who said he felt lucky to get on the flight because he is diabetic and had two shots of insulin left. Others struggled to get back to Australia from Honolulu, Bali and Phuket, Thailand. A Jetstar relief flight from Phuket flew back to Darwin over the weekend.

Some travelers paid thousands of dollars extra for their return travel, in part because other airlines' flights go to other cities in Australia, forcing them to make additional arrangements to get back to Melbourne and Brisbane, the cities from which Air Australia flew. The Melbourne Herald Sun reported that another passenger on the Qantas flight, Sandra Russell, had to fly from Sydney to Brisbane.

Several passengers complained that they had bought travel insurance, only to find that it didn't cover this kind of problem. Reader comments on Australia news sites revealed intense anger at Australian insurance companies, which had already come under fire for their behavior in the wake of the Queensland floods.

The Air Australia Web site has an FAQ page which describes the situation bluntly. "In the short term, the fleet will be grounded," it says. "It also appears highly unlikely there will be any flights in the short to medium term."

In response to the question, "I have a booking - what happens now?" it says, "The flight will not take place. You should make alternate arrangements." The site tells people who paid for tickets, "You may become a creditor of Air Australia."

Some consumers will be able to get their credit card companies to take charges off their bills for service never provided, while the coupon Web site Scoopon said it expected to issue up to $1 million in refunds.

One man said his daughters, aged nine and 11, were able to fly unaccompanied on Air Australia, but other airlines were refusing to accept them as passengers because they were too young, The Age newspaper of Melbourne reported.

Australian regulators investigated Air Australia finances last month but let it continue to fly because they could not substantiate any safety risk from the company's shaky finances, the Sydney Morning Herald reported.

Now the company will be investigated by the Australian Securities & Investments Commission, to see if it illegally traded while insolvent.

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