Edited by Sarah Thompson and Stephen Shore
Just a month after Strategic Aviation Group, owner of low-cost carrier Air Australia, said it was courting a cornerstone investor to fund expansion, rumour has it the dream could be over for Australia’s youngest airline.
Initial rumours swirled early this morning that Strategic could be placed into administration with the privately owned company unable to repay its debt to lender ANZ, though the company has since been at pains to deny it is in trouble.
“We’re not in voluntary administration, sales are going fine - it’s business as usual,” a company spokesman told Street Talk.
Insiders at Strategic blamed rivals with an agenda to push for the chatter which ran quickly through the industry today.
The chatter had been that KordaMentha, already an adviser to Strategic, was standing by as an administrator, but then if the company actually had gone into receivership it would be incumbent on both to inform the market.
High oil prices and weakening yields, or ticket prices, have hurt the industry in general and particularly Australian carriers which have seen an onslaught of offshore competition operating off lower cost bases.
Even if an administration isn’t on the cards, sources suggested that it was not all rosy between Strategic and ANZ, with talks under way today.
Air Australia has been planning to add routes to Vietnam and China this year and eventually to the US west coast off a larger fleet of leased Airbus A330 jets, chief executive and sole shareholder Michael James said in an interview last month.
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