More than 10,000 people who say they are owed money by embattled regional airline JetGo are unlikely to see a cent, with the company poised to be wound up with massive outstanding debts next week.
A new report from the airline’s administrators has estimated its liabilities to be up to $38.7 million.
This includes almost $2.5 million owed to employees and more than $23 million from unsecured creditors, including airline customers and several regional councils – like Shellharbour.
In stark comparison, the company’s maximum “realisable” assets are $142,940, a report to the Australian Securities and Investments Commission (ASIC) says.
JetGo’s fleet of six planes held no value, the administrators said, as two were repossessed and four had no equity due to lease or loan deals.
Likewise, the company’s most valuable asset – an air operating certificate from the Civil Aviation Safety Authority – has no tangible value.
You’ve got the administrators who will get their fees first, then you’ve got secured creditors and then you’ve got the staff, and then you’ve got the unsecured creditors.Shellharbour mayor Marianne Saliba
With this dire financial situation, voluntary administrator – Jonathan McLeod – has recommended those who are owed money vote to wind up the company at a meeting scheduled for next Friday.
JetGo’s money troubles came to light in late May, when the Mercury revealed Dubbo Regional Council had lodged a request to dissolve the company over a $270,000 debt.
Days later, it emerged the company – which had already cancelled numerous flights – was experiencing a “critical shortage of cash” and operating just two planes across regional Australia.
On June 1, the airline cancelled all flights and confirmed it had filed for voluntary administration.
The new report confirms more than 10,000 customers who bought flights have been left out of pocket.
Other parties owed money include eight regional councils (Shellharbour, Albury, Wagga Wagga, Dubbo, Rockhampton, Karratha, Port Macquarie and Tamworth), and at least four other private airports.
Shellharbour council has lodged a claim for $403,404.
The city’s mayor Marianne Saliba said she was “disappointed but not surprised” to hear the council was unlikely to recover any of its money from JetGo’s shortlived operations at the Illawarra Regional Airport.
“Basically this means we’re getting nothing back,” Cr Saliba said.
“You’ve got the administrators who will get their fees first, then you’ve got secured creditors and then you’ve got the staff, and then you’ve got the unsecured creditors.
“So we’re way down the pecking order.”
Cr Saliba said the only ray of hope for those wishing to recover any cash would be if another airline swoops in the buy JetGo and trade out of its financial woes.
“At the last meeting, there were a number of companies that had indicated they were interested in purchasing JetGo,” she said.
“If someone was to buy the airline, they could also buy the operating certificate – which is actually worth the most of all JetGo’s assets but is not worth anything in winding up the company.
“Maybe that would result in people getting more money back, but that’s a matter for the creditors.”
Out-of-pocket customers are advised their best chance of recouping cash is to approach their credit card company and seek a chargeback.
In the statement to creditors, Mr McLeod has warned they may not get to vote to close down the company, due to a Supreme Court hearing scheduled for the day before the creditors meeting.
The result of the earlier legal action from Dubbo, the hearing may result in the company being wound up by court orders instead.
The creditors meeting will be held in Brisbane on July 6.