[Peetwo]

Death of Hartwig's just the beginning??

Via the Oz:

Hartwig Air collapse leaves students out of pocket



Dozens of aviation students have been left tens of thousands of dollars out of pocket following the collapse of one of Adelaide’s oldest flying schools, with liquidators investigating whether assets were stripped from the company prior to it being wound up.

Administrators were called in last month in a last ditch bid to save Hartwig Air, which had operated for more than 55 years at Parafield Airport.

However they were unable to find a buyer or investor to recapitalise the company, leaving creditors - owed more than $2m - with no choice but to wind up the company’s operations.

They include close to 60 students who had paid for flying hours upfront, but were yet to receive their full training entitlement.

More than $500,000 is owed to students of the school, according to the latest report from administrator Mark Lieberenz from Heard Phillips Lieberenz, including several who claim they’re each owed more than $80,000 while having to find another aviation school to complete their training.

Javeria Baloch, 22, was one of several international students who were completing their pilot training through Hartwig Air.

She relocated to Adelaide from Qatar in 2022 to undertake an aviation degree with the University of South Australia, before commencing her practical flight training through Hartwig Air at the beginning of last year.

“In total I paid around $80,000 ... and in the first year, within a few months, they asked for the money upfront, which was a bit weird because we hadn’t completed a lot of flight hours or training,” she said.



“We were told that’s the rules and so the students obviously had to pay the money.

“A lot of students are now waiting to see what happens with the situation ... but I haven’t flown in two months. I have to plan out how and when I’ll be continuing my training, and with who.”

Ms Baloch said she had managed to recoup about $30,000 of the $43,000 she’s owed by Hartwig Air through the federal government’s Tuition Protection Service, which provides assistance to students who are unable to complete programs due to the failure of their training provider.

“I was a bit fortunate and I got a bit more money from TPS, but everyone else in my cohort was offered about $10,000, but that’s not enough to complete their training,” she said.

“The administrators have said at this stage they can’t refund anyone because they’re still working with the liquidation and all the assets ... but at this stage we’re not really hopeful about getting anything back.”

Malaysian international student Anmool Kaur Ranjit Singh, 27, was expecting to complete her commercial pilot licence through Hartwig Air in April last year.

But she said delays caused by Covid-19, high instructor turnover and aircraft breakdowns meant she had still not completed her required flying hours more than a year later, with the company’s collapse leaving her more than $20,000 out of pocket.



“I was supposed to finish around April last year because that’s when my student visa was expiring, and that never happened - I had to renew my visa, not once but twice,” she said.

“The only reason I’m not flying right now is because I have spent $9000 applying for a partner visa. That’s expensive and I pretty much don’t have the money anymore. They were supposed to complete all my education within a certain period of time. That didn’t happen.

“Flying used to be something really beautiful and fun, but especially with what’s happened over the past year, it has been very stressful. It puts me on edge and makes me very anxious - I just don’t know what to do.”

Hartwig Air, previously known as Bruce Hartwig Flying School, had trained more than 3000 commercial and private pilots, with many of its graduates flying for major carriers including Qantas, British Airways and American Airlines.

Its collapse leaves South Australia with just two aviation training providers - locally owned Aerostar Aviation and Flight Training Adelaide, owned by Hong Kong-based Young Brothers Aviation.

Hartwig Air’s directors, David Johnston and David Blake, blamed Covid-19 and rising fuel prices for the company’s deteriorating finances, but in his report to creditors, Mr Lieberenz said other factors were also at play.

“We attribute the failure of the company to poor financial management, lack of profitability and lack of strategic direction,” the report says.

“The company consistently operated at a loss or low profit margin and had inadequate cash flow management.”

As part of his investigations, Mr Lieberenz is looking into the sale and leaseback of two flight simulators, which were transferred to a related company prior to his appointment.

“After thoroughly examining the documentation in support of the sale of the simulators to the related entity together with the procurement of a valuation by Pickles (valuer), we consider that the values attributed to the simulators in the sale to the related entity were below market value,” the report says.

“In addition, the purchase price agreed upon for the sale of the simulators was not transferred to the company. Consequently, it has been determined that the company retains an interest in the simulators.”

“I am in the process of cooperating with the valuer, landlord and the directors to develop a strategy to realise the company’s interest in the simulators.”

Mr Lieberenz is also investigating a potential insolvent trading claim, with early indications Hartwig Air may have been trading while insolvent for more than 12 months, racking up more than $500,000 in debts during that period.

Hartwig Air has changed hands twice since Bruce Hartwig established the aviation training school in Adelaide in 1969.

Mr Johnston and Mr Blake - a former airline pilot and previously chief executive of four airlines in Australia and Europe - acquired the business in 2014.

The company provided shark patrol services to the South Australian government since 2020, and runs the state’s only flight attendant training program.

While it traded profitably in the 2022 and 2023 financial years, sales had been on a downward trajectory, falling by 37 per cent in 2023 and 43 per cent in the current financial year.

The company’s collapse comes amid a shortage of pilots, both in Australia and overseas, with major airlines aggressively competing for pilots and other skilled workers as they look to increase their services to cater to the surge in post-pandemic demand for domestic and international travel.

Major creditors include the Australian Taxation Office and Adelaide Airport, owed more than $500,000 and $275,000 respectively.

Mr Johnston referred enquiries to Mr Lieberenz, who has been contacted for comment.

Hmm...don't worry Dicky King's soon to be released White Paper (GWEP MKII) will be the great saviour of what's left of the GA industry...

MTF...P2