THEY'VE lived life large for the past three years, thinking nothing of handing out $85,000 for a radio fundraising shortfall or of sending an Airbus full of social butterflies on an all-expenses paid trip to Hawaii.
But the egos behind Air Australia, formerly Strategic Airlines, have come crashing down as 100,000 people scramble to recover money paid for tickets that can't be honoured, while 4000 others stranded overseas desperately seek alternative routes home.
The culture behind Air Australia has always been one of living big.
Strategic Airlines, which first registered as a proprietary company in May 2008, was started with $12 million.
It propelled itself on to the Australian social scene when it emerged as a major sponsor of the Nikon Indy 300 on the Gold Coast the same year.
As part of the deal, the company was to fly in 26 Indy cars from the US at $500,000 each ahead of the event, thus cementing its stake as the country's first wide-body charter airline, even before its first specialty aircraft landed on Australian soil.
The Queenslander at the centre of the storm is Michael James, a Bundaberg man born in Wellington to a Queensland mum and a Kiwi dad, who bought half of Strategic Aviation in 2002.
It was a company that had been trading as Air Charter Logistics since 1991, specialising in oversize cargo and charters. Mr James turned it towards defence force contracts, and launched the commercial airline six years after buying in to the company.
Strategic bought its way in to the industry, as Mr James told The Courier-Mail a year ago: 'We're new, so we have to buy our market share."
Much of that involved a massive image-building process, with Strategic spending big to be associated with events such as the Australian Masters Golf in 2009, where directors hobnobbed with the likes of Tiger Woods.
By the time Strategic Airlines landed its first aircraft on Australian soil in July 2009, it had hired airline brokerage businessman Paul O'Brien - husband of Channel 10 newsreader Georgina Lewis - and set up offices in places as far apart as Melbourne, London and Paris.
Mr James was described as being "lion-hearted" for bailing out Kyle Sandilands and Jackie O after fundraising for a disabled boy fell short.
The Strategic Airlines head, who has a child with Down syndrome, went on Channel 9's Today Show in August 2009 to hand over an $85,000 donation for the cause.
In James' words: "You can't fill these families full of hope and then pull that out from underneath them."
That same month, Strategic Airlines was flying high after being announced as the Brisbane Broncos corporate hospitality client that offered a 229-seat Airbus A330 to ferry the team to Townsville.
In September, despite being reminded of the carcasses of numerous airlines, including Compass Mark I and II, Southern Cross, Ansett, SkyAirWorld and others, Mr James was convinced he was on to a winning formula.
In February 2010, Strategic Airlines touched down in Perth to meet increasing demand from the booming resources industry.
By June, Mr O'Brien, Strategic Airlines commercial manager, said the demand for labour in Western Australia meant his company was now running direct flights from Brisbane and Melbourne to Port Hedland and the Pilbara.
It was also running a Perth to Bali service on board its Airbus A320 three times a week - its first international commercial venture.
It launched flights from Brisbane to Denpasar in Bali on December 3, 2010, with fares from $309 one-way.
Its inaugural flight included a mix of 146 local business people, travel agents and resource industry heads, including Strategic's own Mr O'Brien, Damien Vasta and CEO David Blake.
At the time, Citybeat's James McCullough reported that Nova 106.9 boss Sean Ryan, singer-songwriter Lisa Mitchell and Channel 10's Georgie Lewis and Amanda McLeay were among the guests for what he awarded "the best Christmas party" of the silly season.
"While it wasn't strictly your traditional festive season bash, the team flew 146 revellers to Bali for the weekend for some serious partying - and to celebrate the airline's first direct flights to Denpasar from both Brisbane and Townsville," he reported.
The airline is also not averse to mixing it in the racing world and last year was in the midst of the action at the Magic Millions carnival with the Strategic Airlines Stayers Cup, and also at Doomben with the Strategic Airlines Class 6 Plate.
Among the places Strategic's name dropped last year was the 17th Annual Rossi's Oscars bash, where it offered a prize of a business class trip for two to Bali, as it did at Shooters Superclub in Surfers Paradise for the debut CD launch of Gold Coast hip hop R&B artist Jes McGarry.
The party continued last March, when the airline threw a Balinese-themed party at Brett's Wharf in Hamilton for airline staff and guests to celebrate its expansion to Bali, complete with tropical cocktails, Balinese massages and hair beading.
There is no doubt that Strategic has been lapping up the high life, but there was more to come when it rebranded to low-cost carrier Air Australia.
Around 350 revellers descended on its hangar and a rebranded Air Australia plane headed for Bali.
"This one was more a family affair for travel agents then focusing on celebrities," said one person on the flight.
By the time Air Australia hit Phuket, the freebies cranked up. Former Big Brothera co-host Mike Goldman - the face of Strategic Airlines - as well as actress Tania Zaetta and Molly Meldrum, attended.
Two months ago, Air Australia threw its biggest bash, launching its Hawaii service at the Hilton Hawaiian village with 200 guests, including Jules Lund, Mikey Robbins, Fifi Box and Grant Kenny.
From the outset, Michael James was an unlikely candidate for airline owner, having left school halfway through Year 12 to work for a regional airline, before joining Ansett's Brisbane check-in counter and eventually flight crew rosters.
It was a quick rise for Mr James, who held a commercial pilot's licence when Ansett collapsed in 2001 - a year later he was co-owner of Strategic.
Mr James made a packet off the company by turning it towards Australian Defence Force contracts in the Middle East and other conflict zones.
The 2005 tender came under scrutiny amid allegations of inside information being leaked to Strategic by a defence worker it later employed.
In 2010, Mr James was forced to place greater focus on commercial flights as a revenue measure after Strategic lost out to a rival company on a $90 million contract defence force contract.
The airline was taking on losses, going from $2.1 million in 2008-09 to $9.3 million in 2010, using a $6 million loan from the charter business for cashflow. Mr James has heard the Ansett-Strategic comparison many times before.
"Being such a young airline, people say, 'How do I know that if I buy a seat from you, you won't end up like Ansett?'," he said last year.
"But when you look at the Australian market, no major airline doing RPT (regular public transport) routes has fallen over in the past 10 years. Ansett was over 10 years ago, but it's a tough industry."
source: http://www.couriermail.com.au/business/egos-come-crashing-down-after-high-life/story-fn7kjcme-1226274279610
But the egos behind Air Australia, formerly Strategic Airlines, have come crashing down as 100,000 people scramble to recover money paid for tickets that can't be honoured, while 4000 others stranded overseas desperately seek alternative routes home.
The culture behind Air Australia has always been one of living big.
Strategic Airlines, which first registered as a proprietary company in May 2008, was started with $12 million.
It propelled itself on to the Australian social scene when it emerged as a major sponsor of the Nikon Indy 300 on the Gold Coast the same year.
As part of the deal, the company was to fly in 26 Indy cars from the US at $500,000 each ahead of the event, thus cementing its stake as the country's first wide-body charter airline, even before its first specialty aircraft landed on Australian soil.
It was a company that had been trading as Air Charter Logistics since 1991, specialising in oversize cargo and charters. Mr James turned it towards defence force contracts, and launched the commercial airline six years after buying in to the company.
Strategic bought its way in to the industry, as Mr James told The Courier-Mail a year ago: 'We're new, so we have to buy our market share."
Much of that involved a massive image-building process, with Strategic spending big to be associated with events such as the Australian Masters Golf in 2009, where directors hobnobbed with the likes of Tiger Woods.
By the time Strategic Airlines landed its first aircraft on Australian soil in July 2009, it had hired airline brokerage businessman Paul O'Brien - husband of Channel 10 newsreader Georgina Lewis - and set up offices in places as far apart as Melbourne, London and Paris.
Mr James was described as being "lion-hearted" for bailing out Kyle Sandilands and Jackie O after fundraising for a disabled boy fell short.
The Strategic Airlines head, who has a child with Down syndrome, went on Channel 9's Today Show in August 2009 to hand over an $85,000 donation for the cause.
In James' words: "You can't fill these families full of hope and then pull that out from underneath them."
That same month, Strategic Airlines was flying high after being announced as the Brisbane Broncos corporate hospitality client that offered a 229-seat Airbus A330 to ferry the team to Townsville.
In September, despite being reminded of the carcasses of numerous airlines, including Compass Mark I and II, Southern Cross, Ansett, SkyAirWorld and others, Mr James was convinced he was on to a winning formula.
In February 2010, Strategic Airlines touched down in Perth to meet increasing demand from the booming resources industry.
By June, Mr O'Brien, Strategic Airlines commercial manager, said the demand for labour in Western Australia meant his company was now running direct flights from Brisbane and Melbourne to Port Hedland and the Pilbara.
It was also running a Perth to Bali service on board its Airbus A320 three times a week - its first international commercial venture.
It launched flights from Brisbane to Denpasar in Bali on December 3, 2010, with fares from $309 one-way.
Its inaugural flight included a mix of 146 local business people, travel agents and resource industry heads, including Strategic's own Mr O'Brien, Damien Vasta and CEO David Blake.
At the time, Citybeat's James McCullough reported that Nova 106.9 boss Sean Ryan, singer-songwriter Lisa Mitchell and Channel 10's Georgie Lewis and Amanda McLeay were among the guests for what he awarded "the best Christmas party" of the silly season.
"While it wasn't strictly your traditional festive season bash, the team flew 146 revellers to Bali for the weekend for some serious partying - and to celebrate the airline's first direct flights to Denpasar from both Brisbane and Townsville," he reported.
The airline is also not averse to mixing it in the racing world and last year was in the midst of the action at the Magic Millions carnival with the Strategic Airlines Stayers Cup, and also at Doomben with the Strategic Airlines Class 6 Plate.
Among the places Strategic's name dropped last year was the 17th Annual Rossi's Oscars bash, where it offered a prize of a business class trip for two to Bali, as it did at Shooters Superclub in Surfers Paradise for the debut CD launch of Gold Coast hip hop R&B artist Jes McGarry.
The party continued last March, when the airline threw a Balinese-themed party at Brett's Wharf in Hamilton for airline staff and guests to celebrate its expansion to Bali, complete with tropical cocktails, Balinese massages and hair beading.
There is no doubt that Strategic has been lapping up the high life, but there was more to come when it rebranded to low-cost carrier Air Australia.
Around 350 revellers descended on its hangar and a rebranded Air Australia plane headed for Bali.
"This one was more a family affair for travel agents then focusing on celebrities," said one person on the flight.
By the time Air Australia hit Phuket, the freebies cranked up. Former Big Brothera co-host Mike Goldman - the face of Strategic Airlines - as well as actress Tania Zaetta and Molly Meldrum, attended.
Two months ago, Air Australia threw its biggest bash, launching its Hawaii service at the Hilton Hawaiian village with 200 guests, including Jules Lund, Mikey Robbins, Fifi Box and Grant Kenny.
From the outset, Michael James was an unlikely candidate for airline owner, having left school halfway through Year 12 to work for a regional airline, before joining Ansett's Brisbane check-in counter and eventually flight crew rosters.
It was a quick rise for Mr James, who held a commercial pilot's licence when Ansett collapsed in 2001 - a year later he was co-owner of Strategic.
Mr James made a packet off the company by turning it towards Australian Defence Force contracts in the Middle East and other conflict zones.
The 2005 tender came under scrutiny amid allegations of inside information being leaked to Strategic by a defence worker it later employed.
In 2010, Mr James was forced to place greater focus on commercial flights as a revenue measure after Strategic lost out to a rival company on a $90 million contract defence force contract.
The airline was taking on losses, going from $2.1 million in 2008-09 to $9.3 million in 2010, using a $6 million loan from the charter business for cashflow. Mr James has heard the Ansett-Strategic comparison many times before.
"Being such a young airline, people say, 'How do I know that if I buy a seat from you, you won't end up like Ansett?'," he said last year.
"But when you look at the Australian market, no major airline doing RPT (regular public transport) routes has fallen over in the past 10 years. Ansett was over 10 years ago, but it's a tough industry."
source: http://www.couriermail.com.au/business/egos-come-crashing-down-after-high-life/story-fn7kjcme-1226274279610
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