Haughey's helicopter firm lands in liquidation

Celtic Helicopters struggled to come out from the shadow of Charles Haughey

THE APPOINTMENT of a liquidator to Celtic Helicopters marks the end of an era for a business that was begun almost 30 years ago by Ciarán Haughey, then 25 years old, and pilot and business partner John Barnicle.

For those in the industry, the company’s latest tribulations are not a big surprise.

The small number of creditors attending yesterday’s creditors meeting – at which Ciarán Haughey was present – suggests how much the company has shrunk.

Signs that something was amiss emerged three years ago, when Celtic Helicopters announced a significant “reorganisation” of the business which effectively involved its exit from chartered services and its intention to focus on providing a hangar service at its land near Dublin Airport.

The news that Celtic Helicopters was handing back its air operations’ certificate to aviation regulators, made front-page news at the time, as colour writers made abundant use of aviation metaphors to describe the “crash and burn” story of a company that had been a regular presence at the Galway Races and Ireland’s top social events during the height of the economic boom.

But while it is tempting to read the demise of Celtic Helicopters as yet another allegory for the rise and fall of the Celtic Tiger, its history stretches back much further than that.

The company was always more synonymous with the excesses of the Haughey era than the more recent Celtic Tiger boom.

Celtic Helicopters was founded in 1985 by pilots, Ciarán Haughey and Barnicle, a Vietnam war veteran, who was later named by Terry Keane as the pilot who used to fly her and the Haughey children in and out of Inishvickillane, Charles Haughey’s island off the coast of Kerry.

From the outset the company struggled to distance itself from its association with Charles Haughey, at that stage the dominant figure in Fianna Fáil.

In 2006 the Moriarty Tribunal report found that while the company was ostensibly in the control of Ciarán Haughey and Barnicle, Charles Haughey and his associate Des Traynor had raised the initial loan and equity capital for the company, of £160,000, when it was founded in 1985.

The Moriarty Tribunal also said in its report that a number of prominent businessmen had given significant funding to Celtic Helicopters when Charles Haughey was at the height of his political power. Those who contributed included Dr John O’Connell, owner of a medical publishing firm and, later, a minister for health. Others included hotelier PV Doyle and businessmen Séamus Purcell, Cruse Moss and Joseph Malone.

“None of the payments mentioned . . . were prompted by commercial considerations,” the tribunal report stated.

The Tribunal also highlighted other dealings.

When Celtic was in financial difficulties in the early 1990s, its aviation insurance broker Mike Murphy Insurance arranged a loan of £99,000 to pay its premiums. However, company principal Mike Murphy arranged repayments on the loan through an associate firm.

“It would appear that these instalments, having been paid by a company associated with Mike Murphy, were never repaid by Celtic Helicopters,” the report stated.

It noted indications from Murphy that he was fearful of losing customers, especially in the beef industry, and was anxious not to be seen as the person who “pulled the plug” on the company.

In 1992 and 1993, when Celtic’s finances were failing, Murphy “guaranteed” a £100,000 investment in the company by David Gresty.

While this was among five investments totalling £290,329 that did not involve any examination of the company’s difficulties, Murphy stressed again that he had not wanted to make an enemy of the son of the most powerful man in the State.

Celtic Helicopters also featured in the Mahon Report, published earlier this year.

The tribunal said a number of individuals, who subsequently became known as the “Cargobridge” consortium, had successfully sought to rezone land adjoining Dublin airport. The consortium’s members included Abervanta Ltd, which was beneficially owned by Haughey and Barnicle, owners of Celtic Helicopters, whose land was south of the Cargobridge lands.

Separately, in 2006, Celtic Helicopters made a €689,945 tax settlement with the Revenue.

Over the last three decades Celtic Helicopters has been at the forefront of what, even in the heyday of the Celtic Tiger, was always a niche industry in Ireland. The company’s accounts suggest that the company always struggled commercially.

Nonetheless, at its peak, Celtic Helicopters transported some of the most high-profile visitors to Ireland, such as Nelson Mandela, as well as some of the country’s top developers.

As the economic boom fizzled out, the demand for luxury transport, unsurprisingly, stuttered to a halt, prompting Celtic Helicopters’ decision to exit aircraft chartering in 2009.

The most recent accounts for Celtic Helicopters show that its losses widened to €1.78 million in 2010, from €1.584 million the previous year.

The auditors’ report notes that the company is dependent, through Medeva Properties Limited, on the continued support of the Irish Banking Resolution Corporation (IBRC) and the support of other creditors, to continue in business.

Medeva Properties Ltd, which is also controlled by Haughey and Barnicle, has loans which it is understood have been transferred to Nama.

According to Medeva’s most recent accounts to the end of March 2011, the company had loans of more than €3 million due for repayment in five years or more.

Irish Nationwide, now part of the Irish Banking Resolution Corporation (IBRC), also held charges over the company’s land at Knocksedan, Dublin Airport, as well as numerous helicopters, the company filings show.