STA customers told: check your tickets
Thousands of Australian holiday-makers left out of pocket when STA Travel went into administration have been given their first indication of whether they will ever get their money back.
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STA Travel customers wondering if their booked flights will be honoured after the company entered voluntary administration need to check their tickets, the administrator has advised.
Tickets with a code beginning with a triple zero number are at “greater risk” of not being honoured by the airlines, company administrator Jason Tracy from Deloite told the first meeting of company creditors today.
Airlines were likely not to have been transferred cash from STA for these bookings, customers were told.
But for customers holding tickets with an IATA (International Air Travel Association) code that started with a three digit number that was not triple zero, “it’s more likely that will be honoured by the airline,” he said.
Mr Tracy said since he and Tim Norman were appointed as administrators on August 21, they had received over 3800 enquiries from company creditors and customers.
Customers have been advised to reach out to airline, hotel and tour operators to check the status of their outstanding bookings, even if they have a ticket with a triple zero code.
Mr Tracy said the administrators were also looking at ways of recovering funds from tour operators and IATA.
The company, which started life in 1969 as Student Travel Australia, employed 181 full-time staff in 27 shopfronts across the country. The company went into administration in the UK and New Zealand the same week it did in Australia.
Mr Tracy said all staff had now been made redundant except for a team of three who were assisting the administration process.
Those staff cannot modify existing bookings, Mr Tracy said. He also revealed that employees were owed some $2.5 million in outstanding entitlements.
The administration could not provide cash refunds for bookings, he stressed.
STA Travel was split into some 40 different companies around the world, of which three were in Australia.
The Deloitte administration only covers the three Australian companies.
Creditors of the other international companies within the group have been advised to make contact with those entities directly, although Mr Tracy advised the meeting they had had “no meaningful response” from STA’s Swiss holding company.
Much of the group’s operations were centred in the UK, which had added to the complexity of the administration process, he said.
More than 800 creditors and 100 observers had registered for today’s meeting, which was held online due to COVID-19 restrictions.
A second meeting of creditors is likely to be held on September 25, at which they will be asked to vote on whether the company should be wound up, handed back to directors or enter a Deed of Company Arrangement.
A report to be creditors is expected around September 20.
Mr Tracy presented the financial statements of the company, which showed a $13.3 million loss in the 2019-20 financial year and $7.9 million in losses so far this financial year.
He noted that the company auditor provided an “emphasis of matter” on the company’s financial position in June.
In an earlier note to customers who had booked travel, the administrators warned the operations of the company were “complex”.
“Customer deposits, for example, are in many cases not held in Australia, and third party companies overseas are also involved. This is a challenging situation, and the Administrators are investigating possible options (if any) available to customers to allow them to recover any prepaid bookings or continue their travel plans,” the note to creditors stated.
Customers were advised to contact their airline, hotel or travel operator regarding the status of their bookings, and their credit card provider if trips had been paid via card.
The STA Travel administration continues a horror year for the tourism industry, which has included the loss of 8500 jobs at Qantas and 3000 at Virgin Australia, with many more stood down.
At Flight Centre, two thirds of staff internationally have either been stood down or made permanently redundant.
Last week Flight Centre announced it had made a $510 million loss before tax for the 2019/20 financial year, with year-to-date profits wiped out completely in March.
Losses in the Flight Centre group have been somewhat stemmed by “reasonable forward group bookings” in the US, and “record results” from cycle business 99 Bikes, the company’s financial report revealed. Flight Centre bought a 50 per cent share in 99 Bikes in 2008.