Cityjet Rescue Plans Face Collapse – Court Hearing
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Published August 18, 2025
Airline Faces Collapse as Contractors Seek Immediate Payments
Dublin-based airline CityJet is facing a potential collapse of its restructuring plan due to demands from contractors linked to its major shareholder, Strategic Alliance of Regional Airlines (SARA). The dispute, centering on upfront payments for future maintenance work, was brought before the Irish High Court on Monday, raising serious concerns about the airline’s future.
Contractor Demands Threaten Examinership
The core of the issue lies in a request for immediate, monthly upfront payments from contractors, a condition that Kieran Wallace and Andrew O’Leary, the joint examiners appointed by the court from Interpath Advisory, argue would severely undermine CityJet’s ability to continue operating under examinership.Barrister Stephen Byrne,representing the examiners,informed Ms. Justice Eileen roberts that these proposed changes to existing contracts would have a “material impact” on the restructuring process.
In written evidence presented to Judge Roberts, Mr. Wallace stated that the new demands coudl ultimately lead to the failure of the examinership. The court has granted the joint examiners expedited proceedings, scheduling a hearing for Wednesday to seek a declaration that the attempted contract modifications are invalid.
CityJet’s sole shareholder,SARA,is itself 80% owned by Air Investment Valencia (AIV). The court heard that SARA has important service contracts wiht its own subsidiaries and related entities. A key condition for any reinvestment by SARA was a renegotiation of these maintenance contracts, a requirement initially supported by both the joint examiners and an independent expert assessment.
However, Mr. Wallace revealed that negotiations with SARA have stalled, with the shareholder entities unwilling to offer concessions sufficient to ensure CityJet’s long-term viability. This impasse prompted the joint examiners to actively seek alternative investment proposals, and they have already reached an agreement with another potential investor.
Legal Challenge and Previous Restructuring
The joint examiners have communicated to SARA’s legal representatives their belief that any alteration to existing contracts is impermissible. The case will be revisited before Mr. Justice Quinn, who initially appointed the joint examiners. This latest crisis comes as CityJet filed for restructuring for the second time in five years, opening an examinership case on May 8, 2025, according to CAPA.