Examiner appointed to Waterford pilot training college
A JUDGE today granted High Court protection to a pilot training school at the centre of controversy over its students left stranded in Florida so that it can find a way out of its financial difficulties.
Mr Justice Brian McGovern appointed Michael McAteer as interim examiner to the Waterford-based Pilot Training College of Ireland (PTCI) Ltd after its directors petitioned the court for protection saying a survival plan can be put together to keep the company going.
PTCI says the cause of its difficulties include the complete breakdown of its relationship with its US partner, a company called Florida Institute of Technology Aviation (FITA). Earlier this month, around 80 trainees were left stranded after being told their training would not be continuing, each having paid around €80,000 for the course.
PTCI offers a 14-month full-time course to obtain a pilot's licence whereby the initial part was carried out in Florida and the remainder completed in Ireland. PTCI subcontracted this initial part to FITA and an associated company, Pilot Training College Florida (PTCF), carried out the next part.
PTCI's chief executive Michael Edgeworth, who founded the company in 2002 with Tony Kember, said in an affidavit that under the contract, the FITA part of the training was to be completed within a set number of weeks.
However, in 2011 and 2012, training turnaround time in Florida fell into arrears and this had very serious consequences for PTCI because resources in Waterford for the rest of the course were not being utilised in the scheduled time. Customers were lost due to dissatisfaction with the training provided.
Substantial losses were also incurred having to provide additional accommodation and training because FITA was using inexperienced instructors, Mr Edgeworth said.
Tensions arose between PTCI and FITA and there was ultimately "a complete breakdown" in the relationship. FITA and the Florida Institute of Technology itself have since issued court proceedings in Florida against PTCI and PTCF, Mr Edgeworth said.
The breakdown forced the company to suspend training with FITA which in turn led to the Irish Aviation Authority (IAA) suspending its approval for the training which is essential for it to operate.
The cessation in training resulted "in a catastrophic situation" for the company's students, especially for the 179 who were in Florida and the company apologised for this, he said. Mr Edgeworth believes 93 of those students have had their future training organised by the own airlines while efforts are being made to provide an alternative for the remaining students through a training college in Oxford.
Other factors which led to the financial difficulties included loss of key customers, including a major contract from Aer Lingus, he said. The company incurred significant operating losses and it has total liablities now stand at just over €9.7m.
Mr Edgeworth said an independent accountant is of the opinion that it would be more advantageous to creditors, who include AIB and 350 students who have already paid course fees, if the company was to contine to trade rather than be wound up.
PTCI can continue to provide training for the later part of the course, the multi-engine instrument rating section, at its Waterford base where the climactic conditions of variable cloud cover are particularly suitable for this type of training, he said. There is a worldwide shortage of pilots which is due to escalate and PTCI has built up a highly-skilled pool of instructors in Waterford, he said.
The company would be restructured, significantly scaled down and act as a subcontractor for other training organisations that want to outsource.
Mark O'Mahony BL, for PTCI, told Mr Justice McGovern there were three expressions of interest from prospective investors. The IAA had also said it is happy to accept submissions from an interim examiner about the future of the company in relation to the suspension of its approval, counsel said.
Mr Justice McGovern said in circumstances where an independent accountant had indicated that if certain conditions are met the company had a reasonable prospect of survival, he would appoint Mr McAteer as interim examiner and make the matter returnable to next Thursday.
He directed that creditors including the Revenue, AIB, three major trade creditors and the 350 students who have paid fees in advance, should be put on notice of the appointment of the examiner.