The recent administration of Air Service Training (AST) Engineering, a company wholly owned by UHI Perth, has left a substantial financial void, with creditors owed over £1 million now facing the grim reality of receiving no repayment. This unfortunate turn of events for the Perth-based aviation firm has cast a long shadow over the University of the Highlands and Islands (UHI) Perth campus, triggering a wider financial crisis for the educational institution that resonates across the Perth and Kinross community. Financial Fallout at UHI Perth
The repercussions have been far-reaching, leading to significant changes within UHI Perth’s leadership. Several high-ranking officials, including the former principal, Dr. Margaret Cook, have departed or been made redundant in the wake of mounting fiscal pressures. The severe budget shortfalls at the university are currently under intense scrutiny by Members of the Scottish Parliament, highlighting the gravity of the situation for this vital regional learning hub and its contribution to the local economy. Creditors Face Bleak Outlook
Details emerging from the initial progress report by Henderson Loggie, the appointed accountants overseeing AST Engineering’s administration, paint a stark picture of the company’s financial state. The report meticulously outlines the extensive liabilities accrued by the firm. Among the most deeply affected are students who had pre-paid for professional qualifications that ultimately never materialised. Over £450,000 was initially owed to these individuals, a figure subsequently adjusted to just under £300,000 after certain financial offsets were applied.
Former employees of AST Engineering are also listed as preferential creditors, collectively owed approximately £44,000 in outstanding wages, holiday entitlements, and pension contributions. Her Majesty’s Revenue and Customs (HMRC) is due a sum of £21,500 in unpaid tax and National Insurance contributions. While administrators anticipate a partial distribution to these preferential creditors, a shortfall is expected for the tax authority.
However, the outlook is considerably bleaker for those classified as unsecured creditors. This category includes UHI Perth itself, which is owed nearly £152,000 as the firm’s landlord, alongside a group of 36 other suppliers and trades, whose claims total over £223,000. Regrettably, the administrator, Shona Campbell, has confirmed that there is “no prospect” of any payments being made to these unsecured creditors, meaning local businesses and the students affected will not recover their funds. The total amount of claims lodged now exceeds £1.04 million. Asset Liquidation Yields Little
The process of liquidating AST’s assets involved a significant undertaking. Initially, more than 50 different entities expressed an interest in acquiring the company. However, only one bidder was willing to purchase the entire business along with its assets. The administrators ultimately decided that a more favourable outcome could be achieved by selling individual assets rather than a single bulk transaction.
Prior to a comprehensive auction of the firm’s stock, one helicopter was successfully sold for £12,000. Other aircraft that had been grounded, including a Jetstream, regrettably attracted no buyer interest and were subsequently written off. The auction of various other aircraft components eventually generated an additional £17,000. It was determined that a series of past dismantling and reassembly procedures over the years had rendered these planes and helicopters permanently unflyable, significantly diminishing their market value and the potential for greater recovery. A Century of Aviation Training Ends
AST Engineering boasted a rich history, having been established almost a century ago to deliver certified courses in aircraft engineering. Over its long tenure, the company played a crucial role in the sector, providing training to an impressive 190,000 engineers and pilots hailing from approximately 150 countries. At the time of its closure, the business employed 28 dedicated individuals who are now facing an uncertain future.
The firm’s financial health had been deteriorating since the onset of the pandemic, battling a combination of dwindling student enrollments, a reduction in commercial contracts, and escalating operational costs. Adding to the controversy, university management faced criticism after it was revealed they had received warnings about the company’s imminent collapse as early as seven months before its official entry into administration, raising questions about oversight and timely intervention.
In a bid to mitigate the immediate impact on students, UHI Perth stepped in to ensure that the BSc in aircraft maintenance engineering and management programme continued with funding until the academic year concluded. However, all other courses offered by AST Engineering ceased operations when the company formally went out of business, leaving a gap in specialist training provision in the region.
This situation underscores the complex challenges faced by educational institutions and their associated enterprises in the current economic climate, particularly when external factors exacerbate existing vulnerabilities. For the Perth and Kinross community, the financial fallout represents not only a profound loss for the direct creditors but also a difficult period for a key local educational provider navigating significant financial turbulence, impacting its role in local economic development and skills provision.
The repercussions have been far-reaching, leading to significant changes within UHI Perth’s leadership. Several high-ranking officials, including the former principal, Dr. Margaret Cook, have departed or been made redundant in the wake of mounting fiscal pressures. The severe budget shortfalls at the university are currently under intense scrutiny by Members of the Scottish Parliament, highlighting the gravity of the situation for this vital regional learning hub and its contribution to the local economy. Creditors Face Bleak Outlook
Details emerging from the initial progress report by Henderson Loggie, the appointed accountants overseeing AST Engineering’s administration, paint a stark picture of the company’s financial state. The report meticulously outlines the extensive liabilities accrued by the firm. Among the most deeply affected are students who had pre-paid for professional qualifications that ultimately never materialised. Over £450,000 was initially owed to these individuals, a figure subsequently adjusted to just under £300,000 after certain financial offsets were applied.
Former employees of AST Engineering are also listed as preferential creditors, collectively owed approximately £44,000 in outstanding wages, holiday entitlements, and pension contributions. Her Majesty’s Revenue and Customs (HMRC) is due a sum of £21,500 in unpaid tax and National Insurance contributions. While administrators anticipate a partial distribution to these preferential creditors, a shortfall is expected for the tax authority.
However, the outlook is considerably bleaker for those classified as unsecured creditors. This category includes UHI Perth itself, which is owed nearly £152,000 as the firm’s landlord, alongside a group of 36 other suppliers and trades, whose claims total over £223,000. Regrettably, the administrator, Shona Campbell, has confirmed that there is “no prospect” of any payments being made to these unsecured creditors, meaning local businesses and the students affected will not recover their funds. The total amount of claims lodged now exceeds £1.04 million. Asset Liquidation Yields Little
The process of liquidating AST’s assets involved a significant undertaking. Initially, more than 50 different entities expressed an interest in acquiring the company. However, only one bidder was willing to purchase the entire business along with its assets. The administrators ultimately decided that a more favourable outcome could be achieved by selling individual assets rather than a single bulk transaction.
Prior to a comprehensive auction of the firm’s stock, one helicopter was successfully sold for £12,000. Other aircraft that had been grounded, including a Jetstream, regrettably attracted no buyer interest and were subsequently written off. The auction of various other aircraft components eventually generated an additional £17,000. It was determined that a series of past dismantling and reassembly procedures over the years had rendered these planes and helicopters permanently unflyable, significantly diminishing their market value and the potential for greater recovery. A Century of Aviation Training Ends
AST Engineering boasted a rich history, having been established almost a century ago to deliver certified courses in aircraft engineering. Over its long tenure, the company played a crucial role in the sector, providing training to an impressive 190,000 engineers and pilots hailing from approximately 150 countries. At the time of its closure, the business employed 28 dedicated individuals who are now facing an uncertain future.
The firm’s financial health had been deteriorating since the onset of the pandemic, battling a combination of dwindling student enrollments, a reduction in commercial contracts, and escalating operational costs. Adding to the controversy, university management faced criticism after it was revealed they had received warnings about the company’s imminent collapse as early as seven months before its official entry into administration, raising questions about oversight and timely intervention.
In a bid to mitigate the immediate impact on students, UHI Perth stepped in to ensure that the BSc in aircraft maintenance engineering and management programme continued with funding until the academic year concluded. However, all other courses offered by AST Engineering ceased operations when the company formally went out of business, leaving a gap in specialist training provision in the region.
This situation underscores the complex challenges faced by educational institutions and their associated enterprises in the current economic climate, particularly when external factors exacerbate existing vulnerabilities. For the Perth and Kinross community, the financial fallout represents not only a profound loss for the direct creditors but also a difficult period for a key local educational provider navigating significant financial turbulence, impacting its role in local economic development and skills provision.