PROMINENT Byron Bay businesswoman Sevegne Newton is among thous- ands of travellers left in the lurch by the four-month-old budget airline Air Australia going into voluntary administration yesterday.

But speaking to The Northern Star yesterday from a hotel in Honolulu, Ms Newton said it could have been much worse.

Yesterday morning Air Australia, a Brisbane-based budget airline established in November last year, appointed administrators after they couldn't afford basic operation expenses.

It was revealed that Air Australia could not afford to re-fuel some of its planes in Phuket and customers who paid for their flights with cash would probably not get a refund.

About 4000 people are affected.

Ms Newton, former Byron United president, went to Honolulu International Airport yesterday at 8am to catch her Air Australia flight home.

Not long after she arrived airline staff announced the flight would be delayed due to bad weather in Australia.

"People were starting to call home to say they would be delayed and they were told by family and friends that Air Australia had actually gone into liquidation," the Byron Bay business owner said.

"Then 15 minutes later staff said there would be no more flights.

"People are trying to get accommodation but it is a long weekend here so everything is booked out across Honolulu.

"I have a dog being looked after until (yesterday) afternoon and a business to get back to."

She said Air Australia only provided customers with a piece of paper with the numbers and names of other airlines on it.

Ms Newton and her partner are looking at forking out $2500 for flights home.

To make matters worse, Ms Newton had also booked flights through the defunct airline to go to Bali at the beginning of March.

"I guess that is the risk you take when you book with a cheap airline," Ms Newton said.

"The irony was we were packing our things last night and said 'wouldn't it be nice to have another day'.

"You have to be careful what you ask for."