Interim Examiner Appointed to Cityjet
On Friday afternoon (April 17th), the High Court in Dublin appointed an Interim Examiner to Cityjet. Examinership is a process in Irish law under which companies can protect themselves from creditors while they restructure. The move comes amid the coronavirus crisis, which has brought a virtual halt to scheduled passenger flights across Europe.
In recent years, Cityjet has focused on the wet-lease business when it finished its Dublin – London City route in October 2018. The airline currently has franchise agreements with Aer Lingus, Scandinavian Airlines and Brussels Airlines.
Cityjet has also been working on a planned merger with Spanish regional carrier Air Nostrum. First announced at the Farnborough Airshow in the summer 2018, the carriers’ received European Commission approval for the tie-up last summer. Speaking recently, the CityJet Chief Executive Pat Byrne had said that the deal had been close to completion prior to the coronavirus outbreak, but had been temporarily put on hold. “We firmly believe that the airline can sustain itself through this standstill period and will emerge as a stronger company at the end of this process and importantly will be well-positioned to grow its operations and sustain our capacity to continue to employ significant numbers of people.”
“When the industry gets going again, it’s highly likely that cost is going to be the key focus in the bigger airlines. Why put on an Airbus A320 or a Boeing 737 when you could use a CRJ900 with a very low footprint and a very low fuel burn?” Mr Byrne said.
The airline employs 1175 people of which 410 are Dublin based where Cityjet has its headquarters and maintenance facility. Cityjet had been operating a fleet of 28 CRJ-900 Regional Jets and six Avro RJ-85’s. The company had made a profit in 2017 but suffered significant losses in both 2018 and 2019 and currently has debts of €500million according to papers lodged with the court.
At the High Court, Mr Justice Garrett Simons said he was satisfied to appoint experienced insolvency practitioner Kieran Wallace of KPMG as interim examiner to CityJet DAC. The Judge said while the company was insolvent and unable to pay its debts as they fall due, he accepted evidence from an independent expert that the airline has a reasonable prospect of survival if certain steps are taken. Those steps include a successful restructuring of the airline and the examiner putting together a scheme of arrangement with the company’s creditors, which if approved by the High Court will allow the firm to continue to trade as a going concern.
The Judge was satisfied with the details submitted with the court today and adjourned the matter to a date later in the month.
Avro RJ-85 Donated to the Defence Forces
This afternoon Avro RJ-85 EI-RJZ made the short flight from Dublin Airport to Baldonnel where it was accepted by the Defence Forces. The aircraft was donated by Cityjet and will decommissioned in the coming weeks and used for ground training for Defence Forces personnel.
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