Airline on brink of financial collapse

Press, 14 December 1985, Page 3

Airline on brink of financial collapse

PA Nelson The Air Albatross chief executive, Mr Murray Turley, revealed yesterday that his airline is on the brink of financial collapse. Mr Turley said the Nel-son-based commuter airline needed an immediate cash injection of $1 million to $1.5 million. Its difficulties come in the wake of the Tory Channel disaster, in which eight people died when an Air Albatross Cessna crashed. “Receivership is a very real possibility, but not a foregone conclusion,” Mr Turley said at a press conference. The company had been discussing taking in other businesses as partners. “The company needs a broader capital base — $1 million to $1.5 million would satisfy that. The time factor

is critical. Every effort is being made and will be made over the next few working days to find a solution.”

It was “quite feasible” for Air Albatross to trade out of its difficulties if it could arrange the “urgent injection of share capital.” If it survived the present crisis, it would begin a reduced timetable early next year. Air Albatross employs about 100 people, 40 of them in Nelson. Introduction of the new timetable would probably mean staff redundancies of 12 to 15, most of them outside Nelson.

Mr Turley is the main shareholder in the airline, with 57 per cent of the shares.

“If it did go ‘ under, I would come out of it with absolutely nothing except

the shirt on my back,” he said.

The company set out its position in a letter to creditors posted last week, Mr Turley said.

“Some of our creditors are very supportive. Others feel the need of settlement, which is perfectly understandable.”

Mr Turley has also set out the airline’s problems to his staff.

“The tragic loss of our Cessna 402, together with eight lives on October 4 last, caused an immediate but totally understandable loss of patronage of our services by the travelling public,” he said.

“We also experienced a frustratingly high defect rate in our Metroliner fleet during this period.” , ■ , All the defects were minor and quickly fixed.