Bali bombings blamed for airline's suspension

The firm handling the suspension of Bali airline Air Paradise says thousands of people are likely to have their holiday plans disrupted.

Qantas is flying home an estimated 1,500 Australians stranded in Bali after the carrier suspended services yesterday.

Air Paradise has ferried as many as 20,000 people a month between Denpasar and Australian capitals.

Corporate recovery agent Korda Mentha says it will not know the outlook for travellers, employees and creditors until the airline's financial position has been examined.

Spokesman Michael Smith says the company has survived nearly three years of international strife but falling passenger numbers have proven too much after the two rounds of Bali bombings.

"There was a second round of bombings just a few months ago which has really put the crunch again on tourism in Bali," Mr Smith said.

The chairman of the Australia-Indonesia Business Council in Western Australia, Ross Taylor, says he does not believe the airline's woes represent the death knell for Bali's tourism industry.

Mr Taylor says there was a 90 per cent drop in tourism in 2002 after the first Bali bombings but the current drop-off is half that.

He says he is confident Bali will bounce back.

"I would like to think that, as disappointing as this closure by Air Paradise is, that would mark the low point in terms of services to Bali," Mr Taylor said.

He says the airline's decision will be felt strongly in Bali and elsewhere.

"I think we also need to remember that it creates a huge hole for a number of West Australians who are employed at Perth Airport, for example, providing services," he said.

"And check-in staff who provide services to Air Paradise and, of course, people within the travel business."