Failed online travel company Bestjet was reported over the weekend to owe creditors possibly up to AUD 30 million; its founders broke silence to claim the business was in sound financial health when it was sold six weeks before it collapsed – and one comment from a client seemed to sum up a vital point about the whole fiasco.
“We were just in shock and disappointed that consumers have not been given better protection,” said Benjamin Gayler, who used Bestjet to book flights with Emirates from Melbourne to Italy for his family. The Gayler family were preparing to fly away on what Gayler described as “the dream holiday” when the bad news arrived.
Shock over the lack of consumer protection, and surprise that Australian travel consumers can be left so vulnerable, have surfaced frequently in comments by Bestjet clients left out of pocket. Many, understandably, are angry. Some have banded together under a Facebook page to fight for their rights. See: Bestjet fiasco said to affect ‘over 10,000’ travellers
Brisbane-based Bestjet and its subsidiaries, Wynyard Travel Pty Ltd and Brooklyn Travel Pty Ltd, went into voluntary administration on 18 December 2018, with Pilot Partners appointed administrators.
Gayler was among customers notified over the Christmas and New Year period.
“I’ve booked with these types of companies for 20 years,” Gayler told SBS News.
“I didn’t see it as a risky prospect at all. I was quite stunned when this happened.”
Meanwhile, in a statement to ABC News over the weekend, Bestjet founder Rachel James, who helped set up the company in 2012, claimed her family was “distraught” and “devastated” after growing the business and seeing it fold.
“During the last eight weeks, under new ownership and management, Bestjet has gone from a profitable business that followed stringent operational, financial and industry protocols, to one that has devastated thousands of customers and hundreds of staff,” Rachel James told the ABC.
Bestjet owes creditors more than AUD 7 million, the company’s administrator told 9FinanceBusiness News. Travel industry sources estimate the final sum may be between AUD 20 to AUD 30 million.
Points revealed over the weekend included:
- The administrator has received about 2300 Proof of Debt, or claim forms, from people seeking to be listed as unsecured creditors. That number is expected to grow.
- Unsecured creditors, according to 9FinanceBusiness News, include Skyscanner seeking more than AUD 700,000, Kayak seeking more than AUD 422,000 and QBE Insurance (Australia) Ltd seeking more than AUD 85,000.
- One “priority creditor” is Michael James, a former Bestjet employee who was once the boss of failed airline Air Australia, which collapsed in 2012 owing creditors nearly AUD 100 million. The Air Australia collapse left thousands of travellers stranded overseas. Michael James was subsequently banned by ASIC from managing corporations for three years.
- Michael James’ wife, Rachel James, helped set up Bestjet a few weeks after Air Australia collapsed.
- McVicker Investment Group took over the running of Bestjet about six weeks before Bestjet went under.
- The Bestjet collapse appears to justify AFTA’s decision to pull Bestjet’s ATAS accreditation in 2016. Bestjet contested AFTA’s decision unsuccessfully in court. However the company owning Bestjet at the time of the court case with AFTA is not the same company that owned it when Bestjet went into administration.
- In Australia, many clients are left unprotected in the event of such collapses – having to rely on credit card chargebacks and similar (if they apply). Otherwise, to be protected, consumers must have taken out a travel insurance policy that specifically covers the collapse of an agent or principal – or to have booked with a travel company that automatically insures its clients against those risks.
Written by Peter Needham
.jpg){kind=tracking}
