Albury ratepayers stand to lose around $300,000 as a result of airline Virgin Australia falling over.
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The Border Mail has been told by multiple sources the money was owed to Albury Council at the time Virgin entered into voluntary administration in April after the coronavirus outbreak in Australia.
Albury Council chief executive Frank Zaknich did not specify the figure when replying to Border Mail questions about the debt but confirmed the city had liaised with the administrator.
"Albury City has lodged a proof of debt claim to the administrator regarding outstanding amounts," he said.
The debt is linked to fees that are applied to flights operated by Virgin into the council-owned airport.
"The outstanding amount is based on actual passenger movements and applicable passenger and security charges for the preceding months," Mr Zaknich said.
In late March, Virgin announced it was "temporarily suspending" all its Albury to Sydney flights until June 14 due to the impact of COVID-19 which was starting to spread in Australia at that point.
Mr Zaknich declined to answer a question about whether he believed the $300,000 was lost to the city's coffers.
"We understand that the administrator is preparing a report to creditors which will clarify next steps," Mr Zaknich said.
A spokesman for Deloitte, the company administering Virgin, said creditors were not due to receive more information about the status of their claim until a meeting scheduled for August.
Virgin Australia was reported to have a debt up to $7 billion and more than 10,000 creditors in April.
Since then negotiations have begun with a shortlist of potential buyers and there is hope a deal will be reached before the end of June.
There has been speculation a reborn Virgin may cut some regional routes.
Mr Zaknich said the council would work with new owners but was vague when asked if the city would lobby them to keep flying to Albury.
"The Albury Airport plays a critical role in the business, economy and lifestyle offer of our region and NSW-Victoria," he said.
"Council will continue to support increased flight service frequency and destinations to meet the needs of a growing community."
The city has also suffered revenue losses with Qantas and Regional Express cutting flights due to the coronavirus.