A dispute between Budget Travel and the aviation regulator over what the company claims are “unreasonable and unlawful pre-conditions” for renewal of Budget’s licence has been adjourned at the High Court to Monday while the sides try and resolve the matter.
Budget has claimed the regulator’s actions, including failure to accede to the travel operator’s request to return some €4 million of its €11 million bond given its reduced turnover, are greatly hampering the company’s ability to carry on its business and jeopardising the livelihoods of its 189 employees.
Budget’s finance director Eileen O’Sullivan said in an affidavit it is considering “all choices” available to it in terms of its restructuring, including seeking court protection.
The judicial review proceedings by Budget against the regulator were mentioned before Mr Justice John Hedigan who agreed to adjourn the case to Monday. He was told the parties were seeking to settle the dispute.
Budget claims the regulator effectively shut down its business from Monday last because Budget’s parent company had declined to give an “open-ended and unlimited” guarantee for all liabilities of the operator.
It claims the regulator has failed to make a decision on its application to renew its licence, due to expire on October 31st last.
In an email last Tuesday, the regulator said:.. “The Commission is not refusing to issue you with a licence; it has set out the requirements to be met before a licence can issue and once met, the application will be deemed complete and sufficient to conclude the process with the issue of your new licence”.
Budge claims the regulator sought a “letter of comfort” from Budget’s parent company, Primera Travel Group HF, to support Budget until its revenue reserves reached a level of 50 per cent net assets. The regulator also asked that loans
from Primera be subordinated and not repaid without the express consent of the regulator.
Primera did provide a letter of comfort stating it would maintain its 100 per cent shareholding in Budget as long as any bond remained outstanding to the regulator. The regulator then said Primera would have to commit to pay any sums over the value of the bond of Budget if those sums were required to meet any claims against Budget.
Ms O’Sullivan said the regulator, despite examining the company’s books monthly, seemed not to understand why, “in the middle of the worst recession in living memory”, fewer people were booking foreign holidays with Budget.
