Low-cost carrier Air Australia had little more than AU$440,000 in the bank and up to $90 million in debts when it collapsed on February 17, stranding thousands of travellers overseas.
Administrator Mark Korda said about 500 creditors, mainly suppliers to the aviation industry, would recover next to nothing from the airline’s failure.
He said the carrier’s 354 employees could hope to receive only about $5 million of the $8 million in entitlements they were owed, thanks to a government compensation scheme.
Air Australia had collected $36 million from the forward sale of 100,000 now-worthless tickets used to prop up the business.
Formerly known as Strategic Airlines, the Brisbane-based group started domestic flights in 2009 and expanded services to Bali, Phuket and Honolulu. But it was never profitable and racked up $65 million in trading losses.
Korda said the business now was “not viable” and it remained “highly unlikely” that it could be sold to a white knight investor.
“The losses were horrendous,” he said.
Creditors will meet on March 23, when they are expected to vote to liquidate the airline.
by TravelMole Australia
