Creditors of Air Australia are likely to lose everything after the sale of the airline’s main asset fell through.

The process to sell Air Australia’s engineering business had been abandoned, creditors were told at a meeting in Brisbane on Friday, where they unanimously voted to place the failed business into liquidation.

ANZ was the airline’s the biggest creditor, owed more than $20 million.

“Interested buyers dropped off because there is a $1 million a year lease attached to the land and hangar at Brisbane Airport,” a spokesman for administrators KordaMentha said after the meeting.

By placing the company into liquidation, the creditors have ensured Air Australia’s 350 employees will receive some of their unpaid wages.

A federal government scheme to provide basic entitlements will give them about $5 million of the $8 million they are owed.

The Brisbane-based budget carrier was placed into voluntary administration in February, unable to refuel its aircraft due to growing debts.

Air Australia’s primary asset was its engineering business, as it leased its buildings, planes and other equipment.

Several buyers had expressed an interest in the engineering business, and it had been hoped its sale would reap up to $1 million.

All that remains is some ground services equipment, spare parts and tools.