Air Australia’s creditors will be counting on funds raised by the sale of Strategic Engineering, the group’s only asset, as administrators confirmed the airline had only $440,000 in the bank at the time of its collapse.
Speaking at the first creditors meeting in Brisbane yesterday, attended by around 150 people, Mark Korda from KordaMentha revealed the carrier had racked up losses of $65 million over the past 18 months. Its debts came to between $80 million and $90 million.
KordaMentha spokesman Michael Smith confirmed creditors would receive little as there were minimal assets, with all premises and all five aircraft leased.
“There’s really only the engineering business, which is only worth what someone is willing to pay for it,” he said.
However, he confirmed there were a few interested parties and that KordaMentha was working to get the best possible price.
Employee’s super payments, unpaid since the third quarter of 2011, would be the priority for any funds recovered.
The administrator is still working to establish whether the airline had continued to trade while insolvent, but revealed it had been using money from advance ticket sales, a total of $65 million at the time of grounding, to cover its losses.
Meanwhile, Air Australia director Michael James was absent from the meeting but Smith stressed this was not an issue.
“It’s better to go about the proceeding without the old management about,” he said. He confirmed James would become more involved further down the line.
For now, the main priority for KordaMentha was to “assess the liabilities and determine who the creditors are” while compiling the statutory report for the second creditors’ meeting to be held on March 23.
ANZ is the main creditor with the bank estimated to have lost $20 million.
