Outlook poor for creditors of failed Duo

This story is sourced from Pro
See more Pro news »

Prospects for the creditors of collapsed UK regional airline Duo Airways appear bleak after administrators revealed that unsecured creditor claims amount to nearly £40 million ($73 million) – but that only around £2.1 million is available.

Duo’s parent company accounts for over £25 million of the total creditor claim. Another £11 million is made up of trade creditors and claims from passengers.

The two lessors which supplied Duo’s fleet of Bombardier CRJ aircraft also feature on the unsecured creditors’ list with a total claim of more than £1.3 million.

AFS leased two jets to the carrier while Denmark’s Maersk Air supplied the other five. Both have the status of secured creditors, with access to funds set up within Duo to support necessary maintenance on the aircraft once the leases expired.

But the fund for the AFS aircraft only contains £1.9 million, short of the anticipated £2.4 million needed to return the aircraft to an airworthy standard. A similar fund for Maersk Air is also facing a shortfall.

A spokesman for administrator Deloitte & Touche says that, while the full value of the company’s assets has yet to be formally calculated, the return to creditors will realistically be only “pence in the pound”.

In a document detailing the financial position of the Birmingham-based company, the administrator reveals that Duo lost £20.7 million in the nine-month period between 6 June 2003 and 31 March 2004 – nearly 40% more than forecast.