Transaer International Airlines Ltd, described as "technically insolvent", was wound up by order of the High Court yesterday. The Irish company was said to be the largest independent charter airline in Europe, with a fleet of 13 aircraft.
The President of the High Court, Mr Justice Morris, was told negotiations are continuing regarding a possible sale of the company's core business as a going concern.
Mr Justice Morris appointed accountant Mr John McStay, who has a practice in Dublin, as liquidator of Transaer. The winding-up petition, which was supported by creditors, including the Revenue authorities, was brought by the company itself. The court heard a sale of the company's core business would preserve the jobs of a large proportion of the Transaer workforce and generate a significantly higher return than if the assets were to be sold on a piecemeal basis.
Moving the winding-up petition, Mr Lyndon MacCann said the company's problems had been caused by a huge drain on cash resources following an $18 million investment in an American airline, TransMeridian. The Irish company had also guaranteed the liabilities of TransMeridian.
Mr MacCann said Transaer had sustained losses during 1999 due to ongoing leakage of finances through TransMeridian and exceptional difficulties relating to its charter operations.
Although the company's charter business from Dublin operated as normal, difficulties were experienced regarding its German and Greek charter operations. Kurdish rebels in Turkey had threatened to kill tourists visiting that country and that led to massive cancellations by German holidaymakers, which in turn led to cancellations of charter flights by German tour operators.
The war in Kosovo had also a major impact on the company's charter flights to Greece and the company had claimed it was the primary reason for its failure to achieve projected profit. Aircraft were obliged to fly around the air exclusion zone imposed regarding Kosovo and Serbia and this increased operating costs.
The company calculated these exceptional difficulties in relation to the Greek and German markets alone resulted in a $14 million loss last year. Regarding various aircraft leases, the company fell into arrears of £14.5 million. Because of financial difficulties, it was obliged to reduce its fleet to 13 aircraft and this resulted in a reduction in the company turnover of about $11 million for the current year.
The company had operated a 50/50 charter business and "wet leasing" service (under which the company provided an airline with aircraft, crew, maintenance and insurance). This year, most aircraft were on wet leases.
