High Court approves rescue plan for troubled airline CityJet
High Court reporters
A High Court judge has approved a rescue plan for the debt-ridden airline CityJet.
Mr Justice Michael Quinn on Wednesday said he would confirm the plan put forward by the joint examiners of the Dublin-based airline, Kieran Wallace and Andrew O’Leary of Interpath Advisory. The judge said he would give his full judgment in the case next week.
Examinership allows court-appointed examiners up to 100 days to devise a rescue plan for a troubled company.
CityJet sought court protection and the appointment of examiners in May, saying it had just €7.7 million to pay creditors seeking €13 million.
An independent report on its finances said that the business had a reasonable prospect of survival were it placed in examinership. The report found the airline’s net liabilities were €38.5 million at the end of February.
The rescue plan for the airline had been opposed by CityJet’s sole shareholder, Strategic Alliance of Regional Airlines (SARA), and several related entities.
According to court documents, SARA argued that the plan was prejudicial to its interests and that the airline does not have a reasonable prospect of survival under the plan. SARA also argued it would be left in a better position if the airline was liquidated.
These arguments were rejected by the joint examiners.
The joint examiners submitted that the company was receiving substantial investment from an experienced investor and has the support of a key customer, Scandinavian Airlines System (SAS). They also said that the rescue plan will leave SARA in a significantly better position than if the company was liquidated.
CityJet previously went into examinership in April 2020, before emerging from court protection the following August. It was also placed in examinership in 1996.
Run by chief executive and founder Pat Byrne, who is no longer a shareholder, CityJet has flown regional routes for SAS and Germany’s Lufthansa under contract. It uses its own aircraft and crews for this, a practice known in the industry as wet leasing.
