SkyEurope to reorganise under creditor protection
SkyEurope Airlines, the operating subsidiary of SkyEurope Holding AG, today announced that it has been granted creditor protection by the Bratislava I District Court in order for management to carry out a reorganisation.
SkyEurope has voluntarily taken this step to provide the time needed to realise the full potential of the base and route network, restructure the company’s debt, and make the company more attractive for potential new investment.
During the reorganisation, existing supplier agreements must be honoured by suppliers and by SkyEurope. Suppliers will be paid for goods and services received during reorganisation, but the company is protected from action by creditors to enforce payment of pre-existing debts. The objective is for SkyEurope to emerge from the period of creditor protection a stronger and financially stable business. Such creditor protection status has been used successfully by many airlines, mainly in the United States.
SkyEurope will continue to fly its scheduled and charter routes as planned, honouring all current and future flight tickets. The airline remains committed to its usual high standards of flight safety, services and punctuality.
Jason Bitter, Chief Executive Officer of SkyEurope, said, “This is a good step for SkyEurope because it means we will be able to operate without any disruption while we implement our reorganisation. It is good for our customers who may have full confidence in flying SkyEurope for holidays, city breaks, business travel, and friend and family visits.
It is good for our suppliers who will be fully paid for goods and services provided during the reorganisation. And it is good for our employees because it allows us to preserve and protect jobs.”
Between 2007 and mid-2009, SkyEurope restructured its bases and route network in order to simplify operations, improve aircraft and crew utilisation, and reduce its cost base. The cost benefits of this strategy are being realised.
In addition, the company has shown improvement in operating performance indicators such as load factor, which has increased in each of the last six consecutive months, as well as increases in average revenue per passenger and ancillary revenues.
New investment is sought to provide additional liquidity to support the next phase of the company’s development and SkyEurope recently appointed investment bank Reynolds Partners for that process.
There has been ongoing investor interest in SkyEurope and its business plan, although the company’s debt has been a barrier. This period of reorganisation under creditor protection will give the company time to restructure its debt and become attractive for new equity investment.
Nick Manoudakis, Chief Financial Officer of SkyEurope, commented, “We have a
convincing business plan that has been independently reviewed by Ernst & Young and potential investors. With this reorganisation, we are confident that we can secure further investment that will support our business plan and future growth. Together with our already proven low cost base, these measures will deliver a financial turnaround of SkyEurope. We provide an important service of good value flights to and from Central Europe, and our customers, employees, suppliers and business partners will all benefit from a stronger SkyEurope.”