CityJet exits examinership after High Court ruling

More than 400 jobs retained as survival scheme wipes millions off Dublin airline’s debt

Last April, CityJet sought the protection of the courts, claiming it was insolvent due to financial difficulties exacerbated by the Covid-19 outbreak. Photograph: Getty Images

Last April, CityJet sought the protection of the courts, claiming it was insolvent due to financial difficulties exacerbated by the Covid-19 outbreak. Photograph: Getty Images

 

and RAY MANAGH

The High Court has formally approved a survival scheme allowing regional airline CityJet to successfully exit examinership.

The scheme will allow the Dublin-based airline continue as a going concern, on what was described on “a slimmed-down” basis, with more than 400 jobs at the company being retained out of approximately 1,100 previously employed.

That will include 140 out of 400 Dublin jobs. The rest are mostly in Copenhagen, where CityJet operates a service for SAS.

“The airline is confident of recruiting again once market conditions improve,” a spokesman for the company said.

On Tuesday, Mr Justice Michael Quinn said he was satisfied to approve a scheme put together by the airline’s examiner, Kieran Wallace of KPMG, that allowed the airline formally exit examinership.

Late last month the judge, following a formal hearing, said he was minded to approve the scheme after certain steps took place, including the finalising of arrangements made with certain creditors and changes to the airline’s constitution.

On Tuesday the court was told those arrangements and changes had been made, and that no modifications to the survival scheme were required. As a result the judge formally approved the scheme.

The arrangement, which was supported by a majority of the airline’s creditors and shareholders, sees tens of millions of euro of its debt being written off.

CityJet sought the protection of the courts in April, claiming it was insolvent due to financial difficulties exacerbated after its aircraft were grounded due to the Covid-19 outbreak.

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

The airline said it had debts of €500 million and, at the time of entering the examinership process, a net deficit of liabilities over assets on a going concern basis of €186 million.

Creditors include the Triangle Group, several firms involved in the leasing of aircraft, Investec, the Revenue Commissioners, and related related companies.

Approving the scheme, Mr Justice Quinn accepted that creditors would do better under the examiner’s proposals than if the airline was liquidated, which the court was told was the only alternative to the scheme.

Under the scheme, most creditors will get dividends ranging between 15 per cent and 1.25 per cent.