A TROUBLED airline at Filton owes over £70,000 to Bristol businesses and hundreds of thousands of pounds to staff, who have not been paid since February.

More than 50 aircraft engineers and maintenance workers were made redundant by cargo carrier MK Airlines in April.

Some staff are owed more than £20,000 in unpaid wages, redundancy money and holiday pay.

BAE Systems, from which MK Airlines leases two hangars at the Filton airfield, is also claiming £680,000 from the company.

A statement of affairs from insolvency practitioners SPW Poppleton & Appleby revealed that MK Airlines' total debts amount to more than £104 million, including £70m to Transatlantic Aviation Ltd, which is a 100 per cent shareholder and the holding company.

MK Airlines, which has its headquarters in East Sussex, has fallen into administration once before, between June 2008 and June 2009, after serious concerns over its finances.

It was put up for sale but after no buyers came forward it was only saved from ruin when it entered into a Company Voluntary Arrangement (CVA), where creditors agree to be paid back a fraction of what they are owed. That agreement ended in January this year.

Today, it faces entering into a second CVA with its creditors in another bid to avoid the company being wound up.

A meeting is being held in London between the creditors and company directors to decide whether a proposed CVA should be accepted.

Under that proposal creditors would receive only 2p for every £1 they are owed – meaning that of the £70,245.71 owed to businesses in the Bristol area, they would receive just £1,404.88.

Any sale of the company's assets – which include aeroplanes, engines, a simulator and a helicopter – would be insufficient to meet its debts.

Staff are furious at the situation, and many are now taking MK Airlines to employment tribunals.

One worker, who asked not to be named, said: "On April 23 we got a redundancy letter saying we were out of work from that day.

"There were just a few people in accounts, the managing director and his personal assistant left to deal with things.

"When the company came out of administration last year, we were asked to enter into a performance-related pay scheme, based on hours the business could bill for.

"Some months we were earning 20 per cent less than our salary, and it was strongly suggested to us that we do overtime to keep the company running."

Staff also had late payments from July, and now haven't been paid since the end of February.

The worker said: "On April 22 we went into work and BAE Systems had padlocked the gate to the hangar, because MK Airlines hadn't paid the rent.

"Taking into account all that is owed me, including redundancy pay, my salary, my notice period and leave, I am owed more than £20,000.

"It is the same for a lot of the staff and people are not happy."

MK Airlines' financial problems have had a knock-on effect on a number of businesses across the Bristol area.

Avon Dynamic Calibration, in Kingswood, is owed £4,690.39, while Kings Heavy Haulage, in Avonmouth, is £5,489.14 out of pocket.

Same-day courier firm PDQ Direct Dispatch, in Avon Street, St Philip's, is also owed £14,174.61 in unpaid invoices. PDQ was owed about £47,000 from the first time MK Airlines went into administration, for which it received about £1,400 under the CVA.

Now bosses are furious that the company faces going under again so soon.

PDQ manager Lee Brain said: "We are confused as to how the administrators let them come out of administration and then within 10 months they are in the same situation.

"That is the most annoying thing, and the administrators should be held responsible for that."

Mr Brain said that after MK Airlines came out of administration, at first it kept to its promise to pay its debts.

But, four months ago, those payments ground to a halt. Despite numerous assurances, MK Airlines still owes for unpaid work.

Mr Brain said: "We're not by any means facing a crisis, but it is affecting us badly."

In April, MK Airlines voluntarily returned its operating licence and air operator's certificate to the UK Civil Aviation Authority, meaning it could no longer operate as an aircraft carrier.

Established under a different name in 1990, MK Airlines operates Boeing 747 cargo planes between Europe, Africa, Asia and the Middle East.

Three years ago, it operated eight aeroplanes but after it emerged from administration it had a reduced fleet of only two or three.

Last night, the company's website was not accessible and none of its three directors – Michael Kruger, Loay Jolag or David Tattum – were available for comment about the airline's future.