New South Wales airline Brindabella Airlines has entered receivership after its fleet was grounded by regulators last week.
Receivers KordaMentha have called for expressions of interest in the Canberra-based airline, which suffered from regulatory and safety costs, competition and millions of dollars in debt.
KordaMentha partner David Winterbottom said in a statement: “The financial pressures this would have placed on the airline would certainly be a significant factor.”
Qantas and Regional Express are drawing up emergency plans to serve the communities affected by the collapse.
In the meantime customers will be transported by coach. 140 workers face redundancy.
The Civil Aviation Safety Authority grounded four of the airline’s 10 aircraft last month because engine inspections had not been completed on time. Two of those aircraft were eventually allowed back in the air but another six were grounded this weekend for similar reasons.
CASA told the carrier that the aircraft were not to be flown until maintenance reviews were completed and the authority had given approval for their return to service, effectively taking them out over the busy Christmas period.