CityJet seeks court protection as it enters interim examinership

Irish regional airline, CityJet has been appointed an interim examiner by the Irish High Court, allowing the carrier to seek protection from its creditors, as it battles to survive the current COVID-19 crisis.

CityJet donated an Avro RJ85 to the Irish Air Corps. Photo by Jero Vida | AeroNewsX

CityJet, who operate routes out of London City Airport, sought protection in the form of examinership on Friday 17th of April. Under Irish law, this allows a company to have protection from creditors while they conduct a restructuring process. The Irish airline exited scheduled passenger services in 2018. The carrier now operates a model known in the industry as wet-lease operations, providing serviced aircraft and flight crews for carriers such as SAS and Aer Lingus. The carrier has around 1,175 employees, with more than 410 based in Dublin. The carrier has a fleet of 33 aircraft, including twenty-eight CRJ-900 jets and seven Avro RJ85s. The airline recently donated one of their RJ85 aircraft to the Irish Air Corps. According to the Irish Air Corps, “the aircraft will be decommissioned in the coming weeks and will be used for ground-based training”. Senior counsel for CityJet, Rossa Fanning, told the court that “the impact of the coronavirus adversely affected a planned merger with another airline and a proposed private restructure of the company”. The merger airline is believed to be the Spanish airline, Air Nostrum. The planned merge with the Valencian based airline was announced in the summer of 2018 and was approved last year by the European Commission. Mr Fanning also outlined to the court that the regional airline last made a profit in 2017 and had suffered significant losses in 2018 and 2019. He also outlined to the court that the wet-lease carrier had debts of €500 million and over the last three years had net revenues of over €220 million. He highlighted that SAS, CityJet’s main customer, agreed to support the carrier during this interruption, and there have been positive engagements with all its creditors.

CEO and founder of CityJet, Pat Byrne told the Irish Independent that the airline has “applied for examinership in order to preserve the business in the light of the compounding effect of the global shutdown of airline operations due to the impact of COVID-19”. He added, “We have built a great business and a great team at CityJet and I am totally confident that we will see our way through this stage with the support of our key stakeholders.”

CityJet was appointed experienced insolvency practitioner, Kieran Wallace from KPMG by the Irish High Court, who will act as an interim examiner for CityJet. CityJet’s senior counsel welcomed the appointment which would be beneficial for all parties concerned. Despite the current uncertainty in the aviation industry caused by the COVID-19 pandemic, CityJet remains confident that the business can be saved and possibly make a profit after a successful examinership process.