Pilots employed by the collapsed Brindabella Airlines have called on the company's receivers to take on liability for personal loans entered into as a condition of employment.
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A day after Brindabella temporarily stood down 140 employees, including 70 in Canberra, it has emerged that pilots were required to take out personal loans of as much as $30,000 as return for a service bond for training and expenses.
The loans, issued for flight training in the United States and other expenses, were serviced by the company during their employment as is common in the industry.
Brindabella suspended all flights this week as it struggled with millions of dollars of debt. Receivers KordaMentha were appointed for the company and are seeking a buyer for the airline, founded in Canberra in 1994.
The executive director of the Australian Federation of Air Pilots, Simon Lutton, said he had written to the receivers on Monday asking for the loans to be included as debts of the airline, not individual pilots.
''We're very aware of the issue and are taking it up urgently with the receiver,'' Mr Lutton said.
''We are seeking an undertaking that upon examination of the loan arrangements they will be categorised as a debt of the company and not a personal debt. We haven't yet achieved that but we're looking to have urgent discussions on that basis. They've advised us that they know how important it is and they are looking into it right now and will get back to us shortly.''
Mr Lutton said he hoped the matter could be finalised in coming days but that it was too early to say what outcome would be reached.
Pilots employed by Brindabella Airlines declined to speak publicly as their employment has not been terminated.
A spokesman for KordaMentha said the receivers learned about the concerns on Tuesday and would consider the matter.
Receiver Sebastian Hans said on Monday the suspension would last a matter of days, not weeks. He said that employees would not receive payments while stood down and confirmed the company did not hold enough assets to give employees their full entitlements if it was liquidated.
Representatives of the receivers have talked with NSW government representatives about the airline's grounding.
A NSW transport department spokesman said on Tuesday it provided exclusive licences for regulated air routes that service smaller communities of less than 50,000 customers a year.
Qantas, Virgin Australia and Regional Express moved quickly to add extra services for passengers caught up in the collapse before the peak Christmas travel period.
Virgin said special airfares would be put in place for Canberra-Newcastle and Brisbane-Coffs Harbour until December 20.
Passengers booked for flights on the popular Canberra to Newcastle route told The Canberra Times they were still struggling to finalise Christmas travel plans on Tuesday.
Last week, the Civil Aviation Safety Authority grounded six of Brindabella's planes for maintenance inspections.
Four of the company's planes were grounded last month for engine inspections.
Regional Express executive chairman Lim Kim Hai said Australia's regional carriers were ''in danger of an irreversible terminal decline''.
''If nothing significant is achieved within the next three months, Brindabella's collapse could well be a precursor of more to come in the regional sector,'' he said.
REX was being ''inundated'' with employment applications from Brindabella staff.
