Australian Aviation - July 2018

10 AUSTRALIAN AVIATION

Jetgone

The collapse of Jetgo is “intensely disappointing”

NOTAM

GERARD FRAWLEY

PUBLISHER & CEO

Christian ‘Boo’ Boucousis

MANAGING EDITOR

Gerard Frawley

NEWS EDITOR

Jordan Chong

ASSOCIATE EDITOR

Andrew McLaughlin

PHOTOGRAPHY & SOCIAL MEDIA EDITOR

Mark Jessop

FLYING EDITOR

Owen Zupp

SPACE & EDUCATION EDITOR

Solange Cunin

CIRCULATION MANAGER

Louise Harry

PROOFREADER

Bruce McLaughlin

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Daniel Frawley

ADVERTISING SALES

Pat Boucousis & Matt Conway

SENIOR CONTRIBUTORS

Tom Ballantyne, Max Blenkin,

Steve Gibbons, Denise McNabb,

Geoffrey Thomas, John Walton

CONTRIBUTORS

Eric Allen, Ben Cook, Rob Finlayson,

Chris Frame, Kirsty Ferguson,

Rob Finlayson, Matt Hall, Steve

Gibbons, Seth Jaworski, , Chris Milne,

Dave Prossor, Gordon Reid, Paul Sadler,

Michael Serenc, Ian Thompson

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‘That

stress can

contribute

to clouded

judgement.’

D

ebtgo”, screamed the front page

of theIllawarra Mercury. The

collapse of regional operator

Jetgo, which entered voluntary

administration on June 1, is headline

news not just in Wollongong and the

Illawarra, but in regional cities across

the country.

At a first creditors’ meeting on

June 13 it was revealed that Jetgo

had ceased RPT operations (its FIFO

charter arm is still flying) with debts

of at least $17 million and potentially

as much as $32 million.

Among those creditors are local

council-owned airports, which stand

to lose not just prized airline services

but, as is the case for Illawarra

Regional Airport owner Shellharbour

City Council, hundreds of thousands

of dollars in unpaid fees and security

charges.

It was Dubbo Regional Council

which originally tolled the bell on

Jetgo’s problems by initiating legal

proceedings in May seeking the airline

be wound up so it could recover

unpaid debts of more than $270,000.

“The loss of commercial RPT

air services provided by Jetgo to

Brisbane and Melbourne is intensely

disappointing and a significant

inconvenience to the passengers who

had pre-booked flights and travel

plans,” a Dubbo Council media

statement issued on June 1 reads.

“However, in good conscience

Dubbo Regional Council could not

continue to allow unpaid debts to

mount up, debts which were already

in excess of $270,000.”

Of course it is not just major

creditors like regional airports (and

ultimately their ratepayers) who are

hurt by the collapse of an airline, or

the reported 10,000 passengers who

had paid for flights they had yet to

travel on.

It is Jetgo’s 112 staff who are now

out of work who are most keenly

feeling this corporate collapse.

Facing a sudden lack of income is

hugely stressful, and I can empathise

with those Jetgo staff now wondering

how to make their next rent or

mortgage payment.

I imagine too running an airline

business in financial distress is also

hugely stressful – how are we going to

pay our staff next week, what do we

tell our suppliers who keep ringing

every day seeking payment of overdue

bills? – and that that stress contributes

to poor decision-making.

And that stress can contribute

to clouded judgement over whether

to continue trading, perhaps while

searching for new funds/investors

or hoping to ‘trade out’ of financial

difficulties, when logic suggests

(and the Australian Securities and

Investments Commission demands)

that the company be placed into

voluntary administration so that

further debts don’t accumulate.

That clearly, is the hardest, but

most important, decision a company

director can make.

I don’t have any particular insight

into Jetgo’s financial situation and its

decision-making, and nor do I want

to rush to judgement on the viability

of its business model of using regional

jets on long thin regional routes. At

one level it’s fantastic that Jetgo tried

to innovate and do something that had

not been done before in the Australian

airline market.

But often, sadly, there is a reason

why it (in this case long-range regional

jet services) hasn’t been tried before,

because established operators like

Qantas, Virgin and Rex can’t make the

business case stack up.

And giving it a go is one thing.

Accumulating millions of dollars in

debt that leaves staff, passengers and

ratepayers out of pocket is another

altogether.

Sadly, like Ansett, Compass marks

1 and 2, Air Australia/Strategic

Airlines, SkyAirWorld, O’Connor

Airlines, Brindabella Airlines, OzJet,

Skytrans, Macair and many more

before it, Jetgo has become the latest

casualty of poor decision-making and

a brutally tough Australian airline

market.

WHERE’S WARBIRDS?

There’s no Warbirds column in this

issue ofAustralian Aviation as Dave

Prossor has taken some time off for a

well-deserved holiday. Also skipping

an issue is the newly-reinstated Rotor

Torque helicopter news section, but it

will return!

Jetgo has suspended all regular “

public transport (RPT) flights

and entered into voluntary

administration.MIKE FORSBERG