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Insights

Uluru is one of Australia’s most iconic natural wonders. Standing 348 metres high and with a circumference of more than 9km it is truly a sight to take in, and what better way than from the sky?

It started with a novel enough idea – attach a gondola to a tethered helium balloon, and let it gently float up to a height that would allow panoramic views of Uluru and the surrounds. Being a helium balloon, its environmental impact would be minimal, and unlike other possible sightseeing options, it would be affected by only the wildest of weather.  Or so Ayers Rock SkyShip (ARS) thought.

In April 2016, ARS commenced leases with Voyages, a local hotel operator, to launch its business from the Voyages property. There were separate leases in place for the operational site (where the “Sky Ship” was tethered) and a sales/ticketing site, operating out of the Yulara Tour Information Centre.

A further Operator Agreement was also put in place between the two businesses, requiring that:

  • ARS operate the business within specified business hours, and on a daily basis to coincide with Voyages’ business model.
  • ARS would pay a fee to Voyages for each passenger booked on its “flights”.
  • Given the SkyShip could withstand almost all weather, only minimal disruptions to ARS’ operations would be tolerated.

Having signed the lease agreements with Voyages, ARS set about getting ready for its first flights.

Sounds simple enough, right? Unfortunately like all grand ideas, Murphy’s Law tends to rear its head.

Although it had been ordered some time prior, delivery of the SkyShip experienced considerable delays, as the manufacturers continued to re-do and update their designs. Construction of the platform from which the SkyShip would rise also encountered difficulties.

The Civil Aviation Safety Authority issued an authority to operate the SkyShip, but in the name of Astrosphere Pty Ltd, ARS’ former business name. It would take another 5 months for this to be rectified.

In a final blow to ARS, the weatherproof design which had been heavily touted, failed to operate correctly, and within only 2 months, the SkyShip was destroyed by severe weather. No further flights occurred after this time.

It had now been over 2 years since the leases had commenced. Unsurprisingly, Voyages sought to terminate the leases with ARS on the basis it was not conducting daily flights. It gave ARS 14 days to rectify the breaches, which ARS failed to achieve.

Upon termination of the leases, ARS commenced Court proceedings.

In Court, ARS argued a number of grounds as to why it had not been in breach including:

  • Not enough time being given to rectify the breaches.
  • The circumstances leading to the breach were an accident, not deliberate.
  • Voyages had wanted to remove ARS after it commenced operations as it was found to be blocking the views of one of Voyages’ scenic dining rooms, and had unconscionably terminated the leases to achieve this.

Unfortunately, what goes up must come down, and the Court found that none of these reasons were sufficient to override the fact that ARS had failed to operate its business as agreed.

The terminations were upheld, and ARS were ordered to pay Voyages’ costs.

Image Credit – Lynne Nicholson © Shutterstock.com