In Reply to: Insurance companies don't cover a heap posted by Nicno on Friday, 17. February 2012 at 04:04 Bali Time:
who were hit yesterday by this news and can completely understand the sinking feeling you felt in your stomach when you received the sad news.
I can imagine just what yesterday was like for you.
As you know, I owned Golden Bali & Global Travel when Air Paradise ceased its operations and was so happy to be here in my Jakarta office yesterday and not in Hutt Street Adelaide!
It is just so wrong! Travel Agents are bound by law to be members of the Travel Compensation Fund and need to prove their financial viability - even sometimes supporting this with additional insurance - so passengers will not lose out in the event of the agency's insolvency. Yet, for Airlines, there is no such regulation to protect passengers when an airline becomes insolvent. Agents sell tickets - Airlines sell tickets - so one has to ask "Why Not?!".
Even after Ansett and then Air Paradise, Australia's authorities still did not take appropriate action - so now it happens all over again with Air Australia.
What of course many passengers won't realise is that when they receive their refunds on useless tickets, the money will have come from their Travel Agent's Bank Account - and of course its meagre profits. Under Australia's banking regulations, the Agent having collected the money as first point of sale becomes liable, even though they can prove on-forwarding monies to wholesalers/airline who in turn issued the tickets.
Air Paradise pushed many honest and legitimate agencies over the wall. In my case I saw around AU$175,000 just "disappear"from Golden Bali's account as financial institutions simply debited the account to repay my clients.
It's a sad time for passengers, Air Australia's staff - but even more for the poor Travel Agents who will be taking flack from every quarter.
Cheers
Les