Air Australia left thousands of passengers stranded on the airports forced to book other flights to reach their destinations. Several of the company’s employees also resigned during the past few months further worsening the situation. The airline went into voluntary administration in the previous month and the officials are now meeting creditors in Brisbane.
As a result of one of the meetings, the federal government has agreed to pay the unpaid wages of some 300 employees but they will only be paid partially. From a total of $8 million outstanding wages that Air Australia owes, $5 million will be paid.
One of the administrator partners at KordaMentha, Mark Korda said that the there’s nothing much the airlines can pay to the credits. Their returns are expected to be nil.
He said, “Our prognosis is the airline is not saleable, but we have had four expressions of interest for the sale of the engineer business. Because the company leases its buildings, leases its planes, leases its equipment, you don’t have a lot of assets. There’s not a lot to sell.”
Explaining further he said only 1 million could be recovered from the airlines after selling its assets.
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