Former head of failed Air Australia was involved with Bestjet before collapse

The former chief executive and owner of defunct airline Air Australia was closely involved in the operations of recently collapsed budget travel booking service Bestjet, documents reveal.

Guardian Australia reported on Wednesday that the Queensland-based budget airfare company Bestjet and its subsidiaries, Wynyard Travel Pty Ltd and Brooklyn Travel Pty Ltd, went into voluntary administration on 18 December.

Its wind-up has left travellers who booked flights through the company thousands of dollars out of pocket and searching for answers.

“I really haven’t heard anything, and I don’t hold out much hope that I’m going to see the money again,” said Paul, who spent just under $6,200 on flights for his family to visit Greece in November.

“It’s my 50th birthday next year so we thought we’d go on an extended family holiday, we booked the airfares through Bestjet in November and it ended up just shy $6,200 for the five of us, my wife, myself and the three kids.

“We got a confirmation email from Bestjet with all details on it and didn’t think anything more of it [until] my wife saw a post on Facebook about Bestjet going under.

“We rang the airline, Emirates, and they told us the booking had been made but had been cancelled on the second of December.”

Bestjet was founded by Rachel James, the wife of former Air Australia owner Michael James, just weeks after the budget airline’s high-profile collapse in 2012.

Air Australia was almost $100m in debt when it went under, leaving thousands of travellers stranded overseas. Its collapse led to Michael James being disqualified from managing corporations for three years by the Australian Securities and Investments Commission.

In 2016 the Australian Federation of Travel Agents (AFTA), an industry body, stripped Bestjet of its accreditation because it believed Michael James had an influential role in the company.

Bestjet fought the decision in the Brisbane supreme court, producing a resignation letter from Michael James from 2015.

The company argued that between November 2013 and December 2015 he worked as a “fares and pricing analyst”, and “did not have “a senior management position and did not have any role in the day-to-day management of Bestjet”.

But the AFTA’s decision was upheld as part of an interlocutory judgment, in which the court found he “may” have been in a position to influence or make decisions about Bestjet’s business.

Bestjet collapse leaves angry customers thousands out of pocket

A preliminary report prepared last month by Betjet’s administrators, Pilot Partners, said Michael James was involved in the management of Bestjet.

“Our investigations have revealed that Mr James (husband to the former director, Ms Rachel James) was involved in the day-to-day operations of the business,” the report stated.

And now new documents lodged with Asic appear to show he was involved in the finances of the business.

A list of creditors shows Bestjet owes hundreds of thousands of dollars to various companies including travel fare aggregators Kayak and Skyskanner. More than a dozen of the entries include a note stating “no details provided, refer to M James”.

The creditors’ list also includes a company called OTAlab, owed $96,629 for “Phillipines payroll, annual leave and termination notice”. The creditor details state that OTAlab is a related party to Michael James.

Guardian Australia was unable to reach Michael James for comment.

The details around Bestjet’s collapse are made murkier because of its recent sale.

On 2 November it was sold to a company called McVicker International. The company was registered in October.

In a statement to Asic made by its sole director, Robert Bruce McVicker, he says he had a “limited understanding” of the businesses operation because of his short time in control of the company.

“However, it would be prudent to make enquiries to the previous director regarding the balance of the time that this business was in operation,” he wrote.

McVicker also stated that the International Air Transport Association had initially “refused to acknowledge” the business transfer. McVicker said he had “subsequently found out” the “former owner” had advised IATA of the change without supplying Asic updates.

“Which we now assume to understand was due to a regulatory oversight because of the former owners [sic] past.”

Cathay Pacific error sees $16,000 flights sold for $675

The creditors’ report published with Asic does not include the thousands paid in airfares by people like Paul. He said he was resigned to the fact that he was unlikely to see the money.

“We’re a single income with three kids, $6,200 isn’t that easy to come by,” he said.

“Unless we come across more cash than I expect to in the near future then the Greece trip won’t happen.

“We’ve kind of come to terms with it now. I just assume the money is gone. We’re going to be way down the list of creditors and if we get 10 cents in the dollar that will be a good result.”

Source: Read Full Article