The October terrorist bombings in Bali and high fuel prices have brought down Air Paradise International, the leisure airline based on the Indonesian resort island. Air Paradise announced its shutdown with immediate effect on 23 November, when it told its 350 employees of the “suspension” of operations.

It remains unclear whether the carrier will seek to fly again, saying only that it has hired Australian corporate recovery specialists KordaMentha to assist and that it is “reviewing the financial position and the future of the airline”. KordaMentha is the same company that handled the administration of failed Australian carrier Ansett.

“The suspension was due to a significant downturn in the number of tourists to Bali following the recent terrorist bombings,” says Air Paradise chairman and owner Kadek Wiranatha, referring to bombings in October that killed more than 20 people. He adds that “the bombings had devastated the Balinese tourism industry including Air Paradise”.

The airline launched services early in 2003 and operated four Airbus aircraft between its Denpasar, Bali base and several Australian cities. It says that prior to its shutdown it was carrying around 20,000 passengers per month.

Until earlier in 2005 it also had services to Seoul in South Korea and Osaka in Japan. Air Paradise originally intended to launch services in 2002 but was forced to delay its start-up as a result of the first bombings on Bali in October 2002 that killed more than 200 people, most of them foreign tourists.

Qantas leisure subsidiary Australian Airlines will reinstate its full schedule to Bali, which was axed after the bombings, by the end of January. ■

Source: Airline Business