Air Australia goes bust, 300 jobs lost

About 300 people have lost their jobs after budget carrier Air Australia was placed in administration.

The Brisbane-based budget carrier was placed into voluntary administration today, immediately grounding all flights and stranding up to 4000 passengers overseas.

A spokesman for voluntary administrator Korda Mentha told AAP the airline employed 300 staff.

"Most have these have been stood down immediately," the spokesman said.

A few staff members have been kept on temporarily to assist the airline throughout the administration process.

The announcement comes a day after national carrier Qantas announced an 83 per cent fall in profits and the loss of 500 jobs because of tough business conditions.

Qantas CEO Alan Joyce said Qantas and Jetstar would try and fly Air Australia passengers home, with about 4000 passengers abroad with return Air Australia tickets.

The Korda Mentha spokesman said about 100,000 Air Australia tickets that had been sold would now be invalid.

Passengers who bought tickets on a credit card or were covered for insolvency by their insurance were likely to be entitled to a refund, he said.

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