Greater Geraldton council votes to waive $90,000 debt from Virgin Australia after company collapses amid COVID

The City of Greater Geraldton has written of a debt of more than $90,000 belonging to Virgin Australia Regional Airlines after the company was placed in voluntary administration.

Councillors voted on a motion to relinquish the hefty fee at the council’s ordinary meeting on Tuesday, after staff advised them that there was “no possible way of recovering the cost”.

The carrier was placed in administration on April 20, 2020 due to operational challenges brought on by the COVID pandemic.

At the time the airline owed the city a total of $96,371 made up of $4245 in lease fees and $92,126 in passenger and landing fees.

The outstanding debt occurred between January and May 2020, but the company was not officially liquidated until December 14, 2023.

It paid final dividends of $6042, which brought the final balance of unrecoverable funds to $90,329.

All 11 councillor unanimously voted to waive the outstanding amount.

Councillor Michael Librizzi said: ”We’re not going to recover anything else so it needs to come off the financials. We’ve challenged the thought process and how we can further mitigate losses.”

Councillor Aaron Horsman said: “I concur with Cr Librizzi ... if we go forward and work towards not having it happen again.”

In the city’s agenda forum document, the impact assessment states “there were significant adverse economic impacts across Australia from the COVID-19 pandemic . . . however there are no economic impacts in relation to the write-off of the outstanding debt to the city.”

Councillor Kim Parker the arrival of Nexus had been a positive change for the city.

“It just goes to show when we have two airlines operating, we have passengers on planes and bums in seats and we do make money out of it, so it’s great to see,” he said.

City of Greater Geraldton chief executive Ross McKim said Geraldton was not the only local government to take a hit from the liquidation.

“As the liquidation has now been finalised, there is no further recourse available to recover the remaining debt of unpaid fees, and as such the balance owing requires writing-off,” he said.

“There is no impact to this financial year’s operating budget.”