Passengers stranded as Aussie airline goes bust

Budget airline Air Australia has been placed into administration, leaving hundreds of passengers stranded. Photo / Thinkstock

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Fledgling budget airline Air Australia has been placed into administration.

The company posted a statement on its website today.

"On February 17 2012, the Director of the Air Australia group of companies appointed John Park and Mark Korda of KordaMentha as voluntary administrators," it said.

Seven Network reported the airline had suspended all flights, with hundreds of passengers stranded in Thailand.

The Brisbane-based carrier flew domestic routes and to Bali, Honolulu and Phuket.

It was previously known as Strategic Airlines but relaunched in November 2011 as Air Australia with a view to cash in on under-serviced routes.

Chief executive Michael James said during the relaunch that he would not be attempting to compete with Qantas or Jetstar.

"I think it is re-educating Australia that you don't have to go via Sydney any more," he told reporters at the time.

The announcement comes a day after Qantas announced it was shedding 500 jobs due to tough business conditions.

Today's cancelled Air Australia flights
(Local departure times given)

Domestic

Melbourne to Brisbane (11.20am, 5.45pm)
Brisbane to Melbourne (9.40am, 10.40am, 5pm)

International

Melbourne to Phuket (11.25am)
Melbourne to Honolulu (7pm)
Phuket to Melbourne (8.25am)
Honolulu to Melbourne (5.25am)

* Further information for affected Air Australia passengers can be found here.

- AAP