The airline has effectively entered administration, but intends to seek protection which is equivelant to the US Chapter 11 protection to allow them to restructure.
Aer Arann seeks to restructure
Washington DC (26Aug10, 20:37 GMT, 227 words)Irish ATR operator Aer Arann has petitioned to enter examinership following a resolution by the carrier’s board of directors.
A 8 September hearing date has been set for considering of Aer Arann’s application for restructuring under court protection.
Following the hearing Aer Arann says it expects to remain in examinership for 70 days using court protection to re-structure its business. The carrier also plans during that time to conduct negotiations with investors as a “number of parties have expressed interest in the airline”. “Aer Arann intends to operate normally during the period of examinership and intends to fly all Aer Arann services and all Aer Lingus Regional services operated under the airline’s franchise agreement with Aer Lingus,” Aer Arann states.
No Aer Arann flights have been cancelled, the carrier says, stressing it intends to ensure there is no effect on customer travel.
The carrier says the decision to restructure follows two years of losses and negative effects from the volcanic ash disruptions earlier this year. Aer Arann explains it lost €6 million (US$7.6 million) in both 2008 and 2009, and has lost the same amount year-to-date.
“These combined losses have led to a deficit in shareholder funding of approximately €13million at the end of July this year,” the carrier explains.
Aer Arann Islands, which is a separate company, is not involved in the restructuring.
Source: Air Transport Intelligence news
By: rdc1000 - 27th August 2010 at 11:32
Well, of course the investor line could be the typical hype which comes to nothing once they see the books in detail, we will have to wait and see. Only a couple of days ago, Aer Lingus were highlighting how the new franchise was already profitable for them, but perhaps it hasn’t been so good for Aer Arann (yet, it is still in its infancy).
Perhaps this will see the return of Aer Lingus Commuter as a wholly owned EI subsidiary. It may fit the emerging EI business model or a return to more traditional services (as enty’re considering their next alliance options). That said, with EI having used up so much of its bank account to keep operating, I’m not sure they would want to risk spending some of it on Aer Arann, unless they get it ‘for a song.
By: MSR777 - 27th August 2010 at 10:21
Sad news, though I guess all may not be lost if there is this interest from investors. I really hope that it turns out well. It would be interesting to know how beneficial the Aer Lingus franchise has been.
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August 27, 2010 at 10:16 am