Regional turmoil as Queensland carrier collapses

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This was published 15 years ago

Regional turmoil as Queensland carrier collapses

By Matt O'Sullivan

THE nation's regional aviation sector has been dealt another blow after the Queensland carrier SkyAirWorld had all of its aircraft repossessed.

Joining a growing list of casualties in the sector, SkyAir-World called in the corporate paramedics on Friday owing tens of millions of dollars. The carrier will almost certainly not fly again as its only remaining assets include tools, spare parts and an air operator's certificate.

It also casts doubt on a new national carrier for East Timor as four months ago Timor Air signed up one of SkyAirWorld's 94-seat Embraer aircraft to fly from Dili to Darwin and Bali. The Brisbane carrier also provided pilots and crew.

SkyAirWorld called in a voluntary administrator, Peter Lucas, just days after GE Capital's aircraft leasing arm, GECAS, repossessed the carrier's five Embraer aircraft.

Last month SkyAirWorld sacked 40 staff from its 140-strong workforce and grounded three of its five aircraft.

The Herald understands SkyAirWorld owes tens of millions of dollars to more than 100 creditors. GECAS was the airline's financier.

Two months ago another Queensland carrier, MacAir - nicknamed "Slackair" in aviation circles - collapsed with the loss of 200 jobs.

The distress in regional aviation will cast more doubt on air links to towns in regional and rural Australia. Regional Express's Dubbo-based carrier, Air Link, ceased all of its regular services in NSW in December because they did not "make economic sense".

Rex, the nation's largest independent regional carrier, revealed a 20 per cent slump in passengers in January. Its charter operator, Pel Air, suffered a 40 per cent fall in freight.

Backed by Australian, New Zealand and British businessmen, SkyAirWorld began flying three years ago with the aim of tapping the mining industry's demand for charter flights to the outback. It later began commercial flights within Queensland and between Brisbane and Honiara, capital of the Solomon Islands.

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It almost certainly puts to bed the plans of the Indonesian low-cost carrier Lion Air to establish a domestic airline in Australia. Lion Air formed a joint venture with SkyAirWorld last year.

The collapse is also a blow to residents of the Indian Ocean territories who were recently assured of flights to the mainland after National Jet decided against renewing its contract. SkyAirWorld was to begin direct passenger and freight flights from Perth to the Cocos and Christmas islands from April.

Virgin Blue announced plans in January to cut up to 400 jobs and ground five aircraft because of the slowdown in demand for domestic travel.

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