Albury council should never have let JetGo accumulate a quarter of a million dollars in debt, says an Aviation expert who believes regional councils were too interested in the political benefits of a direct service.
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Albury mayor Kevin Mack said the loss was an unfortunate one but an inherent risk of doing business.
He said it was extremely disappointing residents were left out of pocket with no chance for ticket refunds.
“Something like this is unforeseen, if you don’t take the risk, people don’t have the advantage and people have had an advantage for two years of travel,” he said.
“This is a risk of doing business and doing business in this corporate world. It is a lot less money than what other creditors have owing to them.”
Strategic Aviation Solutions chair Neil Hansford said councils had focused too much the politics and ‘good news announcements’ of direct routes instead of protecting themselves.
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“Basically the model JetGo was using out of Albury was never likely to be sustainable,” he said.
“Why keep providing access and services when you’re not being paid?
“You certainly don’t get any extended credit at Sydney or Melbourne or the Gold Coast.”
However, Cr Mack said they were acutely aware of the debts and money was being recouped.
“We’d done our due diligence and felt they were legitimate and were working hard to meet their obligations but in this case they haven’t and it’s a pity,” he said.
“We had numerous engagements with JetGo in the last six to eight months about money that was owed.
“$250,000 is probably the best case scenario because we had chased up other money and had received installments.
“But if you force them into receivership you’ve got no chance of getting your money back so we were having a cautious approach to that.”
Cr Mack said the airport operates separately to council’s general budget so ratepayers would not bear any cost of the debt, which would likely be written off.
“We’ll seek to balance the books and continue on our way,” he said.
In May, Dubbo Regional Council lodged a request to dissolve the company over a $270,000 debt, with the airline filing for voluntary administration on June 1.
Cr Mack said Dubbo’s actions lead to the discovery the airline was in a lot more trouble than everyone thought.
He said council had already spoken to QantasLink, and were keen to talk to other airlines about rebooting the direct routes.
Mr Hansford believes the direct Albury to Brisbane-Gold Coast routes are not viable and it was highly doubtful they would return “unless Albury finds oil, gold or uranium”.
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