High Court extends Cityjet examinership

The High Court has agreed to extend the period of protection given to regional airline Cityjet from its creditors from 70 to 100 days.

Mr Justice Michael Quinn made the order extending the airline's examinership after refusing the President of the airline pilot's trade union IALPA Evan Cullen request to extend the 30-day statutory notice period of redundancies, which in the CityJet pilot's cases is due to expire this week.

IALPA represents most of the airline's Irish based pilots who held a protest this week over what it claimed was the outsourcing of their 57 member's jobs by flying aircraft registered in Ireland but flown by pilots outside of the country.

Addressing the court today Mr Cullen also asked that no redundancies are notified to IALPA's members until the matter is next before the court.

The reason for seeking to have consultation period continued was so that every option can be considered before the examinership process, which he said has significant repercussions for the livelihoods of their members, has been completed.

Mr Cullen, who said IALPA intends to instruct lawyers on the issue, added that the order would not impact the airline's finances as his members remain on the wage subsidy scheme.

Dismissing Mr Cullen's application judge said the court didn't have the jurisdiction to grant such an order within the context of an examinership hearing.

He said his decision did not preclude IALPA making a separate application to the courts in relation to any proposed redundancies.

'Positive' emgagement with proposed investor

The judge also asked lawyers for the company and the examiner to take note of the concerns raised by Mr Cullen.

The Judge extended the examinership period to 100 days, the maximum allowed under Irish law, on the basis that all the required criteria had been met.

The court's extension means that the examiner, Mr Kieran Wallace of KPMG has until July 25 next to formulate a scheme of arrangement with the airline's creditors which if approved by the High Court will allow the business to survive.

In a report to the court Mr Wallace, who was appointed as CityJet DAC's examiner in April, expressed the view that the examinership was progressing, and that there has been a positive engagement with a proposed investor in the airline.

Mr Justice Quinn also noted that the airline has recommenced flying routes on behalf of its biggest customer SAS, something the judge said was "welcome news."

Seeking the extension, which was not formally opposed, James Doherty SC for the examiner said that his client was confident of being able to put a scheme of arrangement to the creditors.

Counsel accepted that there would be redundancies, but said the number of job losses had not been put before the court as negotiations are ongoing.

In April the airline sought the protection of the courts claiming it was insolvent due to financial difficulties which were exacerbated after its fleet of over 30 aircraft was grounded due to the Covid-19 outbreak.

The impact of the pandemic interrupted a planned merger with another airline and a proposed private restructure of the company, it claimed.

The airline and its subsidiaries flies routes on behalf of other airlines including SAS employs 1,175 people, 417 of whom are based in Dublin.

CityJet no longer flies scheduled routes itself, and has moved to a model known in the aviation industry known as 'wet leasing' where it provides serviced aircraft and crews to operate routes for other carriers.

It has debts of €500m, and currently has a net deficit of liabilities over assets on a going concern basis of €186m.

Its creditors include the Triangle Group, firms involved in the leasing of aircraft, Investec, the Revenue Commissioners, as well as debts owed to related companies.

The examinership will return before the courts in late July.

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