Queensland regional airline Skytrans has ceased trading with immediate effect, cancelling all flights and laying all staff off.
The Cairns-based airline flew regional services to Brisbane, Toowoomba, the Sunshine Coast, Mount Isa and Sydney but recently lost a government contract to serve NSW routes which was instead awarded to Regional Express.
Skytrans managing director Simon Wild said the airline had suffered due to the plunging value of the Australian dollar.
"Our initial model for 2015 was based on an exchange rate with the US$0.91, however the majority of our costs are actually in US$, so fluctuations in exchange rates have a material impact on our business," Wild said.
"Within the last few weeks we have seen the Australian dollar fall as low as US$0.81. Unfortunately a drop below US$0.88 means our revised Skytrans model would not be a viable long term proposition.
"In addition to the currency challenge it now appears likely that we will have competition on our Cape routes with an inevitable price war where the only winner would be the airline with the deepest pockets."
The company has allocated A$2 million to cover refunds for passengers with reservations for future flights and has advised customers to contact the airline or their travel agent.
