22/02/2005 - 21:00

Month’s reprieve for airline

22/02/2005 - 21:00

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Creditors of regional airline and charter operator Great Western Aviation have given its administrator Graeme Lean an extra 30 days to find a buyer for the business.

Month’s reprieve for airline

Creditors of regional airline and charter operator Great Western Aviation have given its administrator Graeme Lean an extra 30 days to find a buyer for the business.

Mr Lean’s firm, GT Lean and Associates, was appointed administrator of the airline on January 20, owing about $1.8 million.

Great Western owes about $1.5 million to unsecured creditors and $300,000 in priority payments.

Mr Lean said the business had about 100 creditors.

At one stage Adelaide Airport seized the company’s aircraft for non-payment of airport charges.

The airline had been operating services to Port Lincoln and Kangaroo Island in South Australia, and flights to Halls Creek. It also carried out charter work, largely for the mining industry.

Higher costs and dwindling margins are understood to be blamed for the company’s demise.

The second meeting of creditors, held on February 17, was adjourned for 30 days to give the administrator time to find a buyer for the business.

Mr Lean said aircraft seized by Adelaide Airport had subsequently been released to their owner, the company Great Western was leasing them from.

He blamed the high competition in the aviation business for Great Western’s woes.

“The margin of profit in the aviation business is small,” Mr Lean said.

“The company was competing against two airlines on the tourism routes in South Australia – Rex Airlines, an offshoot of Ansett, and Air North out of Darwin.

“With charter work you have fixed costs but unreliable income.”

Great Western managing director Bob Ballantyne said he hoped any buyer would keep the business’ air operator certificate.

Mr Ballantyne said an air operator’s certificate could range from $200,000 to $2 million due to the time and effort needed to maintain it.

He said the high government charges, along with the WA Government’s policy on route sustainability, had also been to blame for Great Western’s crash.

Until early 2004, he said, Great Western had held a route to Kalbarri.

“We started running a route to Kalbarri and the Government took it off us and gave it to Skippers,” Mr Ballantyne said.

He said he had bought into the business in 1986 after selling out of his interests in the plastics industry.

“I’d been interested in the aviation industry for about 10 years before that,” Mr Ballantyne said.

“We were quite successful for a number of years. But then I think it was a combination of rising government charges, rising fuel cost and a lack of support from the WA Government.”

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