Scoopon hands out $1 million in refunds to Air Australia passengers

Group buying site Scoopon has thrown itself into the complicated Air Australia collapse, offering refunds to stranded customers who bought deals for the airline in July.

The collapse has just occurred as the group buying industry has been expanding into the travel market, with a number of major sites now offering cheaper deals on flights and accommodation in order to branch out from its main product lines.

Scoopon executive general manager Jared Baker said in a statement the company is now assisting customers, reimbursing those who have been stranded – he also claims the company had a representative on the ground within hours.

“We had a representative on the ground at Phuket Airport who’s assisting stranded customers with meals, bus transfers and accommodation,” he said. “We have also commenced the process of reimbursing customers stranded to assist with the cost of getting home.”

The company had run two separate deals in July offering flights to Phuket from Melbourne and Brisbane for $599. Those plans were shattered when Air Australian entered administration last week, cancelling flights and stranding thousands of passengers.

The collapse of the budget airline has sparked discussion of how difficult the aviation industry is becoming for budget players, but has also raised questions about the company itself, and how it passed an audit shortly before the collapse.

The Civil Aviation Safety Authority had learned that while the company had been under financial pressure, there had been no reductions in safety, and thus allowed the company to continue flying.

The company’s 300 staff have been stood down, with Korda Mentha now appointed as administrators. Operations have been halted in the short-term.

Passengers have been irate, with many unable to receive refunds due to terms and conditions in insurance contracts not covering insolvency. As a result, Scoopon says it will offer refunds, with the entire venture expected to cost up to $1 million.

“At a time like this I think all businesses need to put customers ahead of profits and do the right thing,” Baker said.

“I have been surprised and disappointed by the response to date by many travel operators. We hope that they will take our lead and match our move with refunds and offers of support to customers have been impacted by the collapse.”