Origin Pacific, New Zealand's number two carrier, has avoided a formal restructuring or liquidation by convincing creditors to accept a voluntary bailout plan.
More than 50% of Origin's unsecured creditors, representing at least 75% of its NZ$11.8 million ($7.3 million) in debts, have approved a plan, making it binding under local law. The creditors will accept ¢40 on the dollar over five years to keep Origin Pacific flying. Creditors owed less than NZ$10,000 will be paid in full. Origin's founders and main shareholders, Robert Inglis and Nicki Smith, will also inject NZ$2.5 million in new capital.
Origin's problems came on quickly in April after Qantas ended a codeshare deal under which Origin had carried Qantas passengers on New Zealand domestic routes. Origin quickly learned that it was losing most of that domestic feed to Air New Zealand because it was not in global distribution systems under its own name or code.
Inbound passengers were booking Air New Zealand for domestic sectors rather than Origin. Origin has since acquired a limited presence in Sabre, but will need time to recover lost traffic. It also complains that Air New Zealand is targeting it with low fares.
Source: Airline Business
