Initial rumours early this morning have firmed up that Strategic could be placed into administration, or already has been,due to it being unable to repay its debt to lender ANZ.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. One source suggested to Street Talk that KordaMentha, which ran the massive Ansett administration for more than 10 years, has already been appointed.
If the administration is confirmed, it will be the end of an airline – at least in its current form – that had promised to bring competition to Qantas and particularly Virgin Australia, marketing low-cost air fares on a young fleet of aircraft to international leisure destinations such as Phuket and Hawaii in addition to domestic flights.
Air Australia had been planning to add routes in Vietnam and China and eventually 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.
Calls to the press office at Strategic have been met with the vague response that the company cannot comment on anything right now but will be issuing a formal statement. The Air Australia website was still selling tickets for travel this month as of 2:30pm on Wednesday.