Councils are ‘unlikely’ to see money


THREE local councils owed almost $500,000 by failed airline Brindabella are unlikely to ever see a cent, according to administrators.

A new report from accountants Rodgers Reidy reveals the airline collapsed in December under the weight of a $14 million debt.

Moree Plains Shire Council is owed an estimated $190,637, while Tamworth Regional Council is out of pocket to the tune of $130,429.

Narrabri Shire Council is owed $115,741 in unpaid passenger head taxes, fuel and annual licence fees. Figures for Armidale Dumaresq Council are listed as “unknown”.

As unsecured creditors, the councils are almost certain to miss out on any money raised through the sale of Brindabella’s remaining assets, which consist primarily of four planes.

“The administrators do not envisage that there will be any funds available to unsecured creditors from the assets of the companies,” the report said.

In total, the cluster of five companies linked to Brindabella Airlines owe $37.7 million, including a $10.2 million debt to the Commonwealth Bank and $2.8 million in employee entitlements.

But the news could get even worse for the councils, with the report finding the companies may have been trading while insolvent. “Our preliminary investigations into the companies’ financial affairs indicate that they may have traded while insolvent,” the report said.

“Any duly appointed liquidator will be required to investigate this further and establish when this occurred.”

Under the Corporations Act, any money Brindabella paid to the councils while insolvent could be declared void and have to be repaid.

Moree mayor Katrina Humphries said she was angry that Transport for NSW had thrust Brindabella upon the community without doing its due diligence.

“It’s a disgrace that we have been put in a position that has cost our community a lot of money,” she said.

“The (unpaid) fees are very important to the community because they pay for the maintenance of our airport.

“We should never have been put in this position.”

Regional Express pulls out of route

REGIONAL Express (Rex) has announced it will not be applying to Transport for NSW for an exclusive five-year licence to operate the Moree to Sydney service.

The decision yesterday comes just a week before tenders are due to close and leaves interim carrier QantasLink the only airline to have publicly expressed its interest in the regulated route. Rex emerged as the favourite to take on the licence, after volunteering to step in and fill the void left in Moree when Brindabella Airlines went bust in December. But when QantasLink was awarded the short-term contract, robbing Rex of the opportunity to ingratiate itself with the community, the airline changed its tactics. Last month Rex chief operating officer Garry Filmer said, amid a grassroots campaign to woo QantasLink, Moree Plains Shire Council “really have to want us for us to go there”. However, the council rejected Rex’s invitation to make a case on the grounds it could constitute interference in a competitive tender process.

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