Bestjet under Fed Court microscope

YESTERDAY the intimate details of Bestjet’s operations were laid bare in a Brisbane courtroom, with David Lanning, one of the company’s former staff, testifying in a gruelling six-hour session.

Lanning, who owned Wynyard Travel before it became part of the now collapsed Bestjet group of companies, was taking part in a Public Examination pursuant to Federal Court orders obtained by the liquidators of Bestjet, Pilot Partners (TD 02 May).

Part of his job in the merged group became finding a buyer for the organisation, with Lanning detailing a prospective $18 million deal with a company called Anjuna, that was ditched at the 11th hour after Michael James, husband of Bestjet founder Rachel James, changed the terms.

Anjuna Global is the business formed by former World Aviation CEO James Vaile (TD 18 May 2016) with other partners in the venture including former Corporate Travel Management execs Claire Gray and her brother Craig Smith along with Jonathan Harris who brokered the scuppered deal.

Bestjet was also shopped around to other potential buyers including Helloworld and Webjet.

Lanning testified that ultimately Michael James finalised the sale of Bestjet to McVicker International (TD 06 Nov 2018), which placed the business into administration six weeks later.

Lanning confirmed that prior to the collapse Bestjet was turning over more than $800 million annually, but was selling almost every ticket at cost or at a loss.

The company was spending $400,000 to $500,000 a month to have its fares featured on metasearch site Skyscanner, which he said charged 1.9% of sales.

GDS rebates from Sabre were a key source of revenue for Bestjet, with Lanning providing a detailed breakdown of the company’s remuneration which amounted to US$3 per segment, plus an incentive of an extra US$1 if a 500,000 sector target was achieved - along with a further bonus of US$0.45 per segment if a 600,000 “stretch target” was hit.

The company remitted payments to consolidators such as CVFR via eNett, and Lanning confirmed that Bestjet had negotiated a share of the eNett fees which generated as much as $1 million in annual revenue for the business.

Although Michael and Rachel James were also scheduled to appear, it’s understood that they are now set to testify next week, while another executive of the company, Craig McKim-Hill, is expected to appear tomorrow.