Aussie firms launch class action against Mobil

SYDNEY, Jan 18: Aircraft operators have launched a class action against Mobil Oil Australia Ltd. over a fuel contamination crisis which has grounded two-third of the country's light aviation industry, reports AFP.

The action was initiated by lawyers for two aircraft operators -- with many more expected to join -- after the Australian government this week ordered the world's biggest oil company to prepare a compensation plan for the businesses affected.

Their aircraft are among 5,000 piston-driven planes grounded by a Civil Aviation Safety Authority (CASA) directive issued on January 1 because of contaminated Mobil avgas which blocks their fuel systems.

Search and rescue aircraft, firefighting support services, flying doctors, regional charter services, flying schools, freight companies and crop dusting companies have all been affected. Even some RAAF transport aircraft were grounded.

Amid growing anger in the industry and in regional Australia over Mobil's perceived failure to respond, acting Prime Minister John Anderson gave it until close of business on Tuesday to indicate how it will assist businesses.

"I have indicated clearly to Mobil that I think they need to address not just the cost of rectifying the problem, but clearly the economic cost to individual businesses," Anderson said on Monday.

The aviation industry puts the mounting bill for the worst ever fuel crisis at more than 50 million dollars (33 million US) a month.

Mobil has refused to say how it will respond to demands by the government or industry, but said compensation for aviation companies affected by the crisis may take years to resolve.

But it has agreed to deploy engineers to test grounded aircraft once CASA approves a test currently under review by an independent chemist, and the industry was hoping to discover later Tuesday if it works.

Mobil corporate affairs manager Alan Bailey said while the company was seriously considering the claims for compensation it was a very complex issue which could drag on for years.

"It's going to take some time to resolve and there may well be questions of the commercial impacts on various stakeholders in the aviation industry that will take a long time to sort out in entirety," he said.

Lawyer Simon Liddy of Ebsworth and Ebsworth partners, which initiated the class action in the Federal Court, said the case would allow a number of similar claims to be resolved simultaneously.

"It is a far more efficient and constructive process for the many people seeking compensation," Liddy said in a statement.

The case will begin in the Federal Court on Friday.