Revenue seeks clarifications before agreeing to CityJet survival scheme

Revenue is seeking clarification of "important" issues before deciding its position on an application next week for High Court approval of a survival scheme for Irish regional airline CityJet.

At the High Court on Friday, Mr Justice Michael Quinn was told the airline's examiner, Kieran Wallace of KPMG, is recommending the scheme be approved.

James Doherty SC, for the examiner, said the scheme would mean retention of 146 jobs based in Ireland, and the required level of statutory support from the airline's creditors for the scheme had been secured.

Revenue, a creditor of the airline, has yet to decide if it is going to oppose the application. At this stage, Revenue was the most likely party to oppose court approval for the scheme, he said.

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When the scheme was put to the different classes of CityJet creditors, Revenue voted against it, he said.

Grainne Clohessy SC, for Revenue, said it “did not want to do the company down” but wanted clarification from the examiner on certain important issues concerning the airline.

Large sums

She said CityJet was involved in litigation with other parties and large sums of cash, which could be more than €50 million, will come into the company if the airline wins those cases.

If the money does come in, Revenue wants to know where it will go or if it will go towards the airline’s creditors.

It was hoped the clarifications sought would be provided before the court hearing on whether to approve the survival scheme, she added.

Rossa Fanning SC, for the airline company, said it was supporting the scheme.

Mr Justice Quinn said the court should be updated on the Revenue position in advance of the hearing next Wednesday of the application for approval of the scheme.

Last April, the airline sought court protection, claiming it was insolvent due to financial difficulties which were exacerbated after its fleet of more than 30 aircraft was grounded due to the Covid-19 outbreak.

Planned merger

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

The airline and its subsidiaries employed 1,175 people, of whom 417 were based in Dublin.

CityJet no longer flies scheduled routes under its own brand and has moved to “wet leasing”, where it provides serviced aircraft and crews to operate routes for other carriers. It has debts of €500 million and, when entering examinership, had a net deficit of liabilities over assets on a going concern basis of €186 million.

Previously, the court heard the airline had recommenced flying routes on behalf of its biggest customer, SAS.