Air Australia

Air Australia
IATA ICAO Callsign
VC AGC STRATEGIC
Founded 2008 (as Strategic Airlines)
15 November 2011 (as Air Australia)
Ceased operations 17 February 2012
Operating bases
Subsidiaries
Company slogan a breath of fresh air[2]
Headquarters Brisbane, Queensland, Australia
Key people
Michael James (managing director & CEO)
Website airaustralia.com

Air Australia Airways was the trading name for Strategic Airlines Pty Ltd[3][4][5] an airline flying domestic and international scheduled passenger flights. Strategic Aviation, a sister company, flew charter flights using the Air Australia fleet or other leased aircraft. Both companies had their head office in Hendra, Brisbane, Australia.[6]

Air Australia halted all flights and was placed into voluntary administration on 17 February 2012,[7] and into liquidation on 23 March 2012.[8]

History

Founded in 1991 as an air freight broker and trading as Air Charter Logistics, Strategic Aviation Pty Ltd was established by Executive Director, Shaun Aisen. The company specialised in the transportation of oversize or unique cargo, chartering flights on Antonov An-124s, Ilyushin IL-76s and Boeing 747 freighters. In 2002, Michael James joined the company as an Executive Director and equal shareholder. With a background at Ansett and air charter, James assisted the company to successfully bid for the Australian Defence Force Troop Lift Contract. With this diversification, the trading name was dropped and the company rebranded as Strategic.

Strategic's Airbus A330-200 at Sydney Airport (2010)

This contract was initially serviced with a leased Airbus A330 from Portuguese Airline HiFly utilising Australian crews. Former OzJet operations director David Blake was appointed CEO in 2008 to assist with the expansion of the airline side of the business.[9]

The first Australian (VH-) registered aircraft, A330-200 VH-SSA was delivered in July 2009,[10] and the Australian Air Operators Certificate was awarded soon after in September. This was complemented by the third A320 VH-YQA in December 2009.

In June 2009 Strategic purchased the troubled airline OzJet along with its staff (ensuring full entitlements were paid), its Air Operators Certificate and the Perth–Derby RPT route.[11] The route was serviced by a chartered Fokker 100 from Alliance Airlines until Strategic's first Australian registered Airbus A320 was introduced in early 2010.[12]

Air Australia's first repainted Airbus A320-200 in 2011

In February 2011 Executive Director, Shaun Aisen severed his ties with the company leaving Michael James the sole owner. Six months following Aisen's departure from the company six other members of staff left the company as well, namely the chief executive, the chief operating officer and the commercial manager. The main reason for the sudden exodus was opposing views on how the company was heading under the leadership of James. A former senior-staff member stated, "when there were two owners, they were almost opposite poles, which worked to the advantage of the business." Aisen's conservative approach was perceived to have balanced out James's different approach to the running of the company.[13]

In The Sydney Morning Herald on 2 April 2011, it was first claimed that the airline would change its name by the end of the year, in order to create a brand more identifiable with its Australian roots. The name change was confirmed in August 2011, with the airline also planning on becoming a low-cost carrier and announcing service from Brisbane and Melbourne to Honolulu to begin in December 2011.[14]

Administration

Former Air Australia Airbus A320 VH-YQB arriving at Budapest (2012)

On 17 February 2012 at 1:30am the Strategic Group's directors decided that the Strategic group of companies including Air Australia, Strategic Engineering Australia, and Strategic Aviation, would be placed into voluntary administration. This was brought about because the fuel supplier refused to refuel an aircraft in Phuket, Thailand on 16 February 2012 due to mounting outstanding payments. The airlines' directors appointed KordaMentha as administrators.[15]

Air Australia suspended all flights leaving approximately 4,000 passengers stranded in Denpasar (Indonesia), Phuket (Thailand) and Hawaii (USA), as well as domestically in Australia. These passengers were advised that they would have to make their own travel arrangements at their own expenses.[7][16]

KordaMentha found the airline owed creditors up to $90 million but had only $1 million in assets as much of its equipment was leased. Administrator Mark Korda said the airline was "not saleable" and was likely to go into liquidation.[17] The collapse put 300 employees out of work.[18]

On 24 March 2012, the creditors voted to place Air Australia into liquidation.

Services and destinations

The Strategic Aviation group held licences for air charter and air freight brokerage services under the Strategic Aviation banner, which also utilised aircraft from Air Australia and other wet leased aircraft when required.

Air Australia operated scheduled services to:

† Base
CityAirport codeAirport nameNotesRef
IATAICAO
Australia
BrisbaneBNEYBBNBrisbane Airport †
DerbyDCNYCINRAAF Curtin
MelbourneMELYMMLMelbourne Airport†[19]
PerthPERYPPHPerth Airport
Port HedlandPHEYPPDPort Hedland Airport
Indonesia
Denpasar (Bali)DPSWADDNgurah Rai International Airport
Thailand
PhuketHKTVTSPPhuket International Airport
United States of America
HonoluluHNLPHNLHonolulu International Airport[14][20]

Strategic was allocated an additional 1,514 seats per week to Indonesia from the International Air Services Commission (IASC). This is enough for Strategic to operate 10 more A320 services per week; presumably this capacity was to be utilised on four additional Perth–Denpasar flights, three Melbourne–Denpasar and three Sydney–Denpasar per week each.[21] Strategic has also been granted 6 A330 services per week to Phuket from the IASC. Soon after, Strategic announced that they will be flying to Phuket from Brisbane and Melbourne, 2 times per week each.

In June 2011 Strategic Airlines applied for rights to fly to the United States with services to commence in September 2011.[22][23] Strategic announced a 2 per week Brisbane to Honolulu and a 2 per week Melbourne to Honolulu flights to begin on 14 December 2011.[24] The routes were serviced by Air Australia's Airbus A330 VH-SSA, while another wet-leased A330 from Turkish operator Atlasjet took over the BNE-HKT and MEL-HKT routes previously serviced by VH-SSA.

Additionally, in May 2011, Strategic Airlines lodged an application with the Australia-based International Air Services Commission for 1,911 seats weekly on the Australia to China route[25] (no specific routes were mentioned). In its application, the Airline requested the capacity be made available from September 2011 onwards. On 6 June 2011, the International Air Services Commission granted Strategic Airlines 1,911 seats each week on the Australia to China route and media reports suggested that the airline was planning on 3 times weekly services from Brisbane to Beijing or Shanghai.[26]

Air Australia had applied to operate four services per week to Vietnam to begin in March 2012 from the IASC.[27]

Fleet

Air Australia Airbus A320 at Melbourne International Airport

As of May 2010, the fleet consisted of:[28]

Aircraft In fleet On order Seats Notes
J Y Total
Airbus A320-200 3 8[29] 8 144 152[30]
Airbus A330-200 2 6 30 243 273[31]

Strategic's orders for Airbus A330-200s consisted of 6 for expansion in new markets of China and India from both their Melbourne and Brisbane bases.[29] and two for Australian market set for delivery in late 2011 and early 2012.[14]

Controversies

In 2010, it was reported that two Australian Defence officers working in the unit responsible for a $30-million-a-year contract to fly Australian troops to the Middle East were providing information during the tender process to Strategic Airlines, who was later declared the winner. The two members, Captain David Charlton and Warrant Officer Class Two John Davies, then working for the ADF's No 1 Joint Movement Group, were reported to have passed information to company executives about "... key tender dates and Defence's preferred aircraft for the Middle East flights". Defence Department investigations found no case to answer for the two Defence officers involved and declared all parties had complied with fair and transparent tender and evaluation processes. Both officers were subsequently employed in senior management positions in Strategic.[32]

See also

References

  1. ↑ http://www.aviationbusiness.com.au/news/strategic-airlines-sets-up-mro-business
  2. ↑ http://www.aviationbusiness.com.au/news/air-australia-takes-over-from-strategic
  3. ↑ http://australianaviation.com.au/2011/10/strategic-steps-up-to-fill-some-qantas-grounding-void/
  4. ↑ http://news.ninemsn.com.au/national/8367934/stategic-airlines-to-unveil-air-australia
  5. ↑ http://www.mb.com.ph/node/339925/new-budget-carrier-air-au
  6. ↑ "Contact." Strategic Aviation. Retrieved on 31 August 2011. "Brisbane Office 34 Navigator Place, Hendra QLD 4011 Australia"
  7. 1 2 Segal, Dave (16 February 2012). "Air Australia grounds Hawaii flights, hundreds stranded". Honolulu Star Advertiser. Retrieved 17 February 2012.
  8. ↑ "Air Australia voted into liquidation". The Sydney Morning Herald. 23 March 2012.
  9. ↑ Australian Aviation, "A Strategic Play", October 2009 Issue, P42
  10. ↑ Strategic Arrives – Strategic Airlines Press Release, July 2009
  11. ↑ "Strategic steps in to buy OzJet". Travel Weekly. 29 June 2009.
  12. ↑ "http://australianaviation.com.au/2009/12/strategic-a320-heading-to-perth/". Australian Aviation. 16 December 2010. Retrieved 17 December 2010. External link in |title= (help)
  13. ↑ http://www.couriermail.com.au/business/air-australia-boss-michael-james-the-maverick-who-fell-to-earth/story-fn7kjcme-1226274843987
  14. 1 2 3 Creedy, Steve (12 August 2011). "Strategic Airlines enters the low-cost fray". The Australian.
  15. ↑ KORDAMENTHA APPOINTED TO AIR AUSTRALIA (PDF), 17 February 2012
  16. ↑ Ryan, Peter (17 February 2012). "Air Australia grounded and placed into administration". ABC News. Retrieved 17 February 2012.
  17. ↑ "Budget airline Air Australia owes up to $90 million". The Courier-Mail. 29 February 2012.
  18. ↑ "Collapse costs creditors millions". The Sydney Morning Herald. 18 February 2012.
  19. ↑ "$299* one-way Melbourne-Phuket "Thai-riffic Fares!" as Strategic Airlines takes off for Thailand!" (PDF). Strategic Airlines. 19 November 2010. Retrieved 17 December 2010.
  20. ↑ http://www.flystrategic.com.au/
  21. ↑ http://www.iasc.gov.au/applications/files/2010iasc107.pdf
  22. ↑ Rochford, Scott (22 April 2011). "New airline spreads its wings". The Sydney Morning Herald. Retrieved 22 April 2011.
  23. ↑ http://www.regulations.gov/#!documentDetail;D=DOT-OST-2011-0106-0001
  24. ↑ http://www.flystrategic.com.au/Media/Press_Releases.aspx
  25. ↑ Application for Capacity Allocation – China Route
  26. ↑ "Virgin Atlantic Cargo expands in Oz". Air Cargo News. 9 June 2011.
  27. ↑ Application for Capacity Allocation – Vietnam
  28. ↑ [AeroInternational, Ausgabe Mai 2010]
  29. 1 2 Creedy, Steve (18 March 2011). "Strategic Airlines looks beyond $90m contract loss the airline's founder is predicting a small profit this year". The Australian.
  30. ↑ Strategic Airlines official A320-200 seat map
  31. ↑ Strategic Airlines official A330-200 seat map
  32. ↑ http://www.smh.com.au/national/defence-bidders-had-inside-help-20100901-14njz.html

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