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Collapse of Compass Airlines: liquidator discusses the company

JOHN HIGHFIELD: The Federal Government is providing no encouragement for supporters of Compass Airlines, and after a meeting with Compass President, Bryan Grey, yesterday the company's receiver, Ian Ferrier, is also giving no new grounds for optimism. Mr Ferrier says the fate of Compass will be known within a month, but has expressed reservations about attempts to salvage the fallen airline. Helen McCombie asked Mr Ferrier about his concerns.

IAN FERRIER: I don't have a concern about the proposed Compass rescue; my concern is that people are assuming that by merely putting in $30 million it can be fixed in a matter of days. That just simply isn't the case. Compass is a complex financial problem; it's also a complex business problem, and to arrest the losses and to ensure that the company is successful in future requires a number of ingredients, the most important being the funds, the money, the availability of staff, having facilities, having the aircraft and the airport facilities; having, of course, a customer base, and having, above all, management which can focus upon profitability and ensure that the company does survive.

HELEN McCOMBIE: Do you think Mr Grey has been too optimistic?

IAN FERRIER: Yes, I do, but thank God he has. If that wasn't the case we wouldn't have had Compass out there discounting and creating a niche in the Australian market which was definitely needed.

HELEN McCOMBIE: But do you think he's being too optimistic now about the chances of putting together a rescue package?

IAN FERRIER: Well, perhaps he is, but that's to his credit. I mean, he's working towards a rescue. I don't believe it will be successful without all the ingredients I've mentioned. But perhaps you get the right combination between his optimism and my more cautious approach.

HELEN McCOMBIE: How long do you think it will take to actually come to some sort of conclusion?

IAN FERRIER: I think it will take a month. It's a significant company with very complex issues, as I've mentioned, and it's impossible to contemplate that you can fix that in a short period of time. A month ... should be adequate.

HELEN McCOMBIE: So you think that it will take a month to decide if there is a suitable rescue package?

IAN FERRIER: Yes, sure. We've got to have all of the elements in place and it will take that long. You don't actually get people to write their name on a $30 million cheque or to participate in the management or to make facilities available unless you have everything in place. And it takes time.

HELEN McCOMBIE: How much money do you think you will need to actually get Compass up and running again?

IAN FERRIER: Well, it's difficult to put a figure on the money because it depends upon the configuration of all the other issues. Certainly it won't be any less than $30 million, but the amount will become known, I guess, in the next month when we look at how it relates to all the other issues.

HELEN McCOMBIE: So it's likely to be more?

IAN FERRIER: I'm not sure.

JOHN HIGHFIELD: Ian Ferrier, receiver for Compass Airlines.