Creditors to decide Air Australia fate

Creditors to decide Air Australia fate
By admin

The first meeting of creditors of Air Australia will take place at the end of March as it emerged the carrier has run up debts amounting to tens of millions of dollars.

The meeting will take place on March 29 during which creditors will receive the first report from administrators KordaMentha, who were appointed by Air Australia last week when the carrier was unable to pay to refuel its aircraft.

Creditors, which are likely to include banks, airports, fuel suppliers, agents and wholesalers, will decide at the meeting whether to keep the airline in administration in the hope a buyer may emerge or liquidate the company.

“The creditors will be guided by the report from administrators,” a spokesman for KordaMentha said. “The prognosis is not good.”

While hope remains that a buyer will be found, that prospect appears increasingly unlikely as it is hard to see what the assets of Air Australia will bring to any existing carrier.

The spokesman said it is working through the financials and estimated debts would be in the “low tens of millions”.

Air Australia management were continuing to lie low after the spectacular failure of the operation which only began life in its current guise in November.

There has been criticism that Air Australia continued to sell tickets just hours before administrators were called in, while staff have been described as “truly disgusted” at being kept in the dark.

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