Regional Queensland airline Skytrans falls victim to tough trading conditions

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• 18 Dec 2014
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The planes of Cairns-based aviation business Skytrans are parked end to end at the Cairns Airport, some already stripped of parts. Picture: Brendan Radke. Source: News Corp Australia

Skytrans managing director Simon Wild. The airline had to make 101 staff redundant when a state government contract went to a NSW firm. Picture: Marc McCormack Source: News Corp Australia

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EMBATTLEd regional Queensland airline Skytrans has succumbed to tough economic conditions and ceased trading after carrying its last passengers yesterday.

In a blow to the aviation sector, the demise of the family-owned Cairns business is expected to catch customers unaware and make travel to Cape York more difficult.

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The airline, which celebrated its 25th anniversary on New Year’s Day, laid off 121 staff in November after losing a key government contract to service two routes.

The exchange rate of the Australian dollar also played havoc with its business model since the majority of its costs are in US dollars.

Managing director Simon Wild said late yesterday he would seek legal and financial advice over the next few days but a resumption of flights in the short to medium term was unlikely.

Talks with potential investors proved fruitless and the State Government has been informed, he said.

“This is not only a sad day for the business, but more importantly, for our staff and indeed the passengers and communities of North Queensland,’’ Mr Wild said.

The remaining 67 staff have been made redundant and all staff entitlements, worth more than $4 million, have been paid.

Mr Wild declined to say how much cash on hand the airline had or how much was owed to unsecured creditors but vowed that all debts would be paid.

“We have a healthy bank balance and can meet all our lawful current obligations,’’ he said.

“Skytrans is fortunate to be in a position that it can conduct an orderly wind down of the business.’’

The airline owned or leased eight Bombardier Dash 8 aircraft, a twin-engine plane that carries 36 passengers.

Mr Wild said other airlines entering the market, rising costs, cutbacks in government spending and the state of the broader economy had also played a part in the decision to stop trading.

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