The City of Karratha has registered as a creditor with the administrators of Jetgo and put on hold airport upgrades to accommodate international flights in the wake of the regional airline going into voluntary administration last week.

Brisbane-based Jetgo was set to operate return flights between Karratha and Singapore and Karratha and Brisbane from later this year under a sponsorship agreement signed with the City, but with the company in administration, those plans are now in doubt.

City of Karratha Mayor Peter Long said planned modifications to Karratha Airport to facilitate international flights had been deferred pending an outcome.

“The Department of Home Affairs has advised that the City’s application is on hold while the airline works through the administration process,” he said.

The City refused to say how much money they had put into the sponsorship agreement with Jetgo, citing the details as commercial in confidence.

Cr Long said the agreement indicated all City payments to Jetgo were to be refunded if the services did not go ahead.

He said the City had thoroughly assessed Jetgo’s finances before signing the agreement and believed the company was financially secure at the time.

“Prior to signing the sponsorship agreement, the City undertook a detailed review of Jetgo’s financial performance and carried out number of independent risk assessments on the airline and the proposal,” he said.

“Based on the information and outcomes of these reviews the City understood that Jetgo’s financial position was sound.”

“We understand that, due to a number of factors, Jetgo’s financial position has deteriorated since the agreement was signed in December 2017.”

Jetgo administrators McLeod and Partners were contacted for details of Jetgo’s financial status but failed to respond by the time of print.