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Australian airline runs out of money, stranding thousands

From Jessica King, CNN
updated 9:41 AM EST, Fri February 17, 2012
STORY HIGHLIGHTS
  • Air Australia runs out of money, leaving about 4,000 passengers stranded
  • The airline has gone into administration and grounded its fleet
  • It advises customers to make alternative travel arrangements
  • People are left stranded in Hawaii, Thailand, Indonesia and Australia

(CNN) -- Thousands of travelers have been left in the lurch around the world after the carrier Air Australia went into administration and grounded its fleet Friday.

"It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately," the company said in joint statement Friday with its newly appointed administrators, KordaMentha.

About 4,000 passengers in total have been left stranded in Hawaii, Thailand, Indonesia and Australia as a result of the suspension, said Michael Smith, a spokesman for KordaMentha.

"It also appears highly unlikely there will be any flights in the short to medium term," the airline's statement said, advising passengers to make alternative arrangements.

The airline had sold about 100,000 tickets for future flights, Smith said. With no indication from Air Australia when it might resume operations, those tickets could end up worthless.

Some customers may be entitled to refunds, the airline said, depending on how they bought their tickets. But it added that customers without the relevant insurance who paid in cash are unlikely to be eligible for refunds.

"Apparently, the straw that broke camel's back was inability to pay for airline fuel," said Michael Ilyine, an accountant from Geelong, Australia.

Ilyine and his wife were on their honeymoon in Thailand when they were left stuck at the airport in Phuket, he said, after their Air Australia flight was grounded with their baggage in the hold.

CNN's Jethro Mullen contributed to this report.

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