"…This is not only a sad day for the business, but more importantly for our staff and indeed the passengers and communities of north Queensland. "All staff have been made redundant. Everyone has already been paid their entitlements. "Over $4 million dollars [has been] paid out in staff entitlements – $2 million to 121 staff made redundant late November and early December, due to the loss of a large contract, and the remaining 67 staff were paid $2 million in entitlements today. "We are all well aware that the aviation market has been tough and we knew that it would get tougher with Skytrans in 2015." After Skytrans lost its government contract in October, Mr Wild told Fairfax Media he was hopeful for the company's future opportunities.

But on Friday, that prediction proved to be overly optimistic. "Since the loss of a large government contract we had been working on a business model that included focused services on the Cape routes utilising three aircraft," Mr Wild said. "This included a reduction of operating costs and a workforce restructure. This 2015 business model indicated a small profit and whilst a reduced version of our current business, it was projected to be a viable albeit smaller business." But Mr Wild said the falling Australian dollar put paid to those plans. "The majority of our costs are actually in US dollars, so fluctuations in exchange rates have a material impact on our business," he said.

"Within the last few weeks we have seen the Australian dollar fall as low as US 81¢. "Unfortunately a drop below 88¢ means our revised Skytrans model would no longer be viable. "In the past few weeks we have been monitoring the exchange rate to see if the dip was only temporary, but unfortunately this appears to be a longer term adjustment with even predictions the Australian dollar could fall as low as 75¢." Impending competition on Cape York routes also contributed to the airline's demise, which Mr Wild said would have resulted in an "inevitable price war". "It would be a war I would not be prepared to enter as it would have jeopardised staff entitlements," he said.

"We have been talking with possible investors and have pursued these interests diligently, but unfortunately every road pointed to unsustainability and as such we could and would not entice investors to a business we did not believe ourselves had a strong future." Mr Wild said Skytrans had a "healthy bank balance" and could meet all its lawful obligations. Mr Wild said $2 million had been set aside to refund customers and pay suppliers. "We have spoken with both the state government and other airlines to discuss the potential for them to provide aircraft for stranded passengers," he said. Mr Wild said details would be released on the Skytrans website.