AER ARANN is believed to owe the Dublin Airport Authority (DAA) just under €2 million in aeronautical fees relating to its activities at Dublin, Cork and Shannon.
This makes the DAA the second biggest creditor behind AIB, which is owed €3.9 million.
Aer Arann, which is owned by Galway businessman Pádraig Ó Céidigh, entered interim examinership late on Thursday to get court protection from its creditors for at least 70 days as it tries to restructure the business and to secure additional investment. The airline has accumulated losses of €18 million since the start of 2008.
Michael McAteer of Grant Thornton was appointed as interim examiner. A full hearing has been been pencilled in for September 8th.
It is understood the Revenue Commissioners are owed about one month’s worth of employee taxes and PRSI.
Informed sources told The Irish Times the airline’s decision to enter examinership was related to pending cashflow difficulties now that the busy summer booking season has ended, rather that pressure from a particular creditor.
It is understood that about 75 per cent of the €6 million losses accumulated between January and July of this year were related to disruption caused by the volcanic ash crisis.
In recent weeks, the airline has e-mailed customers offering “Happy Hour” discounts on domestic and UK flights.
On August 19th, Aer Arann offered up to 50 per cent off flights to the UK and 25 per cent off domestic routes for bookings made that day.
Aer Arann’s difficulties come in spite of a strong start to its regional service with Aer Lingus. It carried more than 100,000 passengers from its launch on March 28th to the end of June, according to figures released by Aer Lingus on Tuesday.
A fifth aircraft was recently added to the service to operate four routes from Shannon.
“They’ve all proven to be ahead of expectations,” Andrew Kelly, Aer Arann’s director of corporate affairs, said yesterday.
Aer Arann and Aer Lingus moved to reassure passengers yesterday that it was business as usual for the regional service during the examinership process.
Aer Lingus is not thought to be owed any money by Aer Arann. Under the terms of the franchise deal, the bookings are made through Aer Lingus’s website.
Aer Lingus takes a franchise fee from each passenger fare and pays the balance to Aer Arann when the aircraft has flown the route.
Aer Arann is also in receipt of €13 million a year from the exchequer as a subvention for five public service obligations (PSO) routes from Dublin to Donegal, Derry, Knock, Sligo and Galway.
This is part of a three-year contract that expires in July 2011. The fee is paid one month in arrears so the State would not be out of pocket were Aer Arann to cease trading.
The Department of Transport said the PSO routes would continue to operate during the examinership process.
Aer Arann was paid €108.6 million between 2002 and 2008 to operate PSO routes.
