Air Australia collapse leaves thousands stranded

At least 4,000 Australian passengers have been stranded overseas by the collapse of Brisbane-based budget carrier Air Australia.

Administrators say they will work through the weekend to try to find a “white knight” to save the airline and the jobs of its 300 workers.

Qantas chief executive Alan Joyce said both Qantas and Jetstar would fly stranded passengers home, with Qantas looking at putting on supplementary services.

Virgin Australia said it would assist Air Australia passengers stranded in Denpasar in Indonesia, with $199 fares to Brisbane, Sydney or Melbourne.

Flight Centre in Australia said as many as 10,000 of its customers with future bookings would be affected.

Mark Korda, a spokesman for administrators KordaMentha, said the airline had run out of money to refuel its aircraft.

“We’ve had to suspend operations at the moment, that’s the first thing we’ve done and it’s possible we’ll be able to find a white knight to save the airline but it’s early days yet,” he said.

The administrators said people who had paid by credit card or have travel insurance are highly likely to get refunds, but those who paid in cash may have lost their money as the airline had no cash for refunds.

“Unfortunately if you paid by cash, it is likely you will not be entitled to a refund unless you took out insurance and that insurance covers an event of insolvency,” the administrators said in a statement.

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