Business overview Australian Flying School (‘AFS’) is a company that provides aircraft pilot training and specialist ins

[answerhappygod]

Business overview
Australian Flying School (‘AFS’) is a company that provides
aircraft pilot training and
specialist instruction services to individuals (‘clients’) which
was incorporated in the State of
Victoria in 1980. Tracey Miles and Jenny Wallis are the Directors
of AFS, in addition to
being the Chief Flying Instructors accredited by the Civil Aviation
Authority (‘CAA’).
AFS is located at Newtown Airport, a private airport on the
outskirts of Sydney. Each year
Newtown Airport is the location of the annual air-show and AFS
is a key participant in the air-
show’s program. Tracey and Jenny view the expense as a marketing
exercise aimed to
attract new prospective students.
The flying school employs three Grade 1 Instructors and five Grade
2 Instructors, in addition
to five administrative staff who manage the accounts receivables
and payable functions, and
student licensing confirmations with the CAA. The instructors
receive company benefits of
“free” independent (non-instruction) flying time of 200 hours per
year to any location in
Australia; however, this flying time is the minimum required by the
CAA to maintain the
Instructor rating licence.
AFS is generally a highly profitable business, however in the
2019/20 financial year student
enrolments were at an all-time low due to the Covid-19 pandemic and
a tax loss of $250,000
was reported.
Strategic Business Transactions & Key Client Matters
The Directors have provided the following statement of the
strategic business transactions
and key client matters which have occurred over the 2020/21
financial year.
- After heavy marketing, Jenny managed to secure a training
contract with an Australian based commercial airline, Kangaroo
Airlines Ltd. The contract provided for AFS to train their first
officers for a period of three years, commencing 10 May 2021 at a
cost of $700,000 per annum. However, on 20 June 2021, 3 | P a g e
Kangaroo Airlines decided to terminate their contract, effective
immediately due to undisclosed reasons. Kangaroo Airlines refused
to compensate AFS and so AFS engaged their solicitors to recover
the loss in revenue. Finally, on 30 June 2021, Kangaroo Airlines
agreed to pay compensation of $1,000,000 after lengthy legal
discussions.