Regional airline goes bust as resources business contracts
PERTH (miningweekly.com) – The downturn in the resources industry has contributed to the collapse of regional airline Skytrans, which ferried its last passengers on Friday.
The family-owned, commercially operated airline, which served Queensland, particularly outback and regional Queensland, the Gulf County and Cape York, said it would seek legal and financial advice over its options, but MD Simon Wild cautioned that these options would not include restarting flights in the short to medium term.
“With the downturn in the aviation industry and the contraction in the resources sector over the past two years, the business has been resizing itself to fit the market and lower its costs, and dispose of surplus assets and retired debt.
“Unfortunately, with contraction of alternate revenue streams, the business relied heavily upon its Queensland Department of Transport and Main Roads contract to underpin the airline during the current downturn,” Wild said.
The state government contract was lost in mid-October last year, forcing the carrier to implement large cutbacks, resulting in 121 staff being made redundant at the time.
Wild noted that with the contraction in the resources sector, the loss of the state government contract “turned a snowball into a wrecking ball”.
“With the erosion of the company’s cash position due to the payout of staff and virtually no viable future for the airline, we have elected to discontinue the business with a view to maximise cash and asset reserves,” Wild said.
All staff have now been made redundant.
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