Air Australia / Strategic Aviation Ceases Operations

Air Australia, previously known as Strategic Aviation, went into voluntary administration in the early hours of Friday 17 February and subsequentially ceased operations. The airline had only a few days ago denied that it was entering into administration and was still taking bookings the day before the announcement was made. Thousands of passengers are affected by the shutdown, with many stranded overseas.


KordaMentha has been appointed as administrators, and are best known for handling the administration of Ansett Airlines when it shut down. KordaMentha has stated on the Air Australia website that "It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately. For clarity, it also appears highly unlikely there will be any flights in the short to medium term. The Administrators will decide on the strategy for the group during the following days and weeks."

Air Australia's troubles had possibly began much earlier. In 2010, when the airline was named Strategic Aviation, it lost a $30million contract with the Australian Defence Force (ADF) to transport troops to the Middle East. It then restructured as a full-service carrier operating scheduled flights with an Airbus A330, as well as operating Airbus A320 aircraft around Australia, including for a brief time, services between Gladstone and Brisbane. Sadly though, Strategic cancelled these services as it reportedly found the competition from QantasLink too great.


In early 2011, one of the two key shareholders pulled out, and by November 2011, Strategic Aviation restructured again as a lower-cost airline under the new brand name of Air Australia. CASA reportedly expressed concerns as to whether the airline could meet its safety requirements, and in December 2011, insolvency insurance coverage for Air Australia was withdrawn. Air Australia also claimed that it would make a profit in 2011/12, but said it was looking for "cornerstone" investors. It was rumoured that the airline had debts of $30 million, and that creditors had begun closing in. Earlier in the week, reports began circulating that administrators KordaMentha were being consulted.

Strategic Airlines Releases New Air Australia Livery

Strategic Airlines has released the first images of the airline’s new 'Air Australia' livery to be introduced later this year.



The new branding was designed for the airline by CumminsRoss.

Launched in 2009 and headquartered in Brisbane, Strategic Airlines - soon to morph into Air Australia - is the nation's newest domestic and international carrier.

The airline operates scheduled passenger services on routes including Melbourne-Phuket, Brisbane-Phuket, Brisbane-Bali, Brisbane-Port Hedland and Perth-Derby. Domestic flights between Melbourne to Brisbane and direct flights from Melbourne to Honolulu and Brisbane to Honolulu will commence from December, 2011.

It plans to move to seven leased A330s over the next three years, with the fleet growing to three by the first quarter of next year.

An additional A320 will come to Australia later this year to bolster the three narrow-body planes already here and a fifth could be added early next year. It has added an A320 base in Melbourne.

Strategic Airlines Last Flight to Gladstone Airport and an Announcement of Re-Branding to Air Australia

Strategic Airlines' Airbus A320-200 VH-YQB operated the final VC520/521 and VC524/525 flights between Gladstone and Brisbane on Friday 12 August.

As previously reported, Strategic's withdrawal appears to be the result of commercial difficulties experienced by the airline since it arrived at Gladstone Airport in April. The Airline has also announced it was withdrawing from Townsville, and axing flights on the crowded Perth-Denpasar route.


Coincidentally, Strategic Airlines has announced today that it will rebrand itself as Air Australia, becoming Australia's newest low-cost carrier.

The Airline's restructure involves taking on new international and domestic services.

The airline hopes to take advantage of Virgin Australia's repositioning and the brand damage to Tiger Airways Australia.

The airline will move to its new low-cost business model from the end of October and will launch new services to Honolulu from Brisbane and Melbourne, as well as increase the number of services to Bali from Brisbane and to Phuket from Brisbane and Melbourne, all from December.