Sunday 19 November 2017

Examiner appointed to pilot school as parents tell court of concerns

Tim Healy

AN airline and the parents of students owed money by a pilot training school expressed concern in the High Court today about the running of the school in the last 18 months.

A lawyer for the Kazakhstani national carrier, Air Astana, and a number of parents and students, were among those who turned up in court today when Mr Justice Brian McGovern confirmed the appointment of Michael McAteer as examiner to the Waterford-based Pilot Training College of Ireland (PTCI). The company last week sought and was given temporary court protection to give it time to come up with a scheme aimed at securing its survival.

Earlier this month, around 80 people who were undergoing part of their PTCI training at a facility in Florida were left stranded after being told their training would not be continuing, each having paid around €80,000 for the course. Around 350 trainees and prospective trainees are now owed money in fees paid to PTCI.

As part of a survival plan proposed by an independent accountant, PTCI is to concentrate on what has been its core activity, multi engine instrument rating (MEIR) training, at its Waterford base where the climactic conditions of variable cloud cover are particularly suitable for this type of training.

Frank McManus, whose daughter is one of the trainees, told the court today he was concerned that many of the students had not reached the MEIR stage of training would now have to find and fund alternative interim training, which had previously been sub-contracted out by PTCI.

Brian Kealy, another parent, said he would like to see the examiner look at the performance of the company in the last 18 months because it appeared to be trading with continuing losses and deferring substantial amounts of income when at the same time it was having difficulty in getting students.

His wife, Martina, said despite an audit of PTCI for the Irish Aviation Authority (IAA) in 2011, in which it looked at the company's ability to continue training pilots for another year, the IAA said it could do so. "When the IAA were asked, they said they were happy but they continued and then they collapsed," she said.

The court also heard Air Astana, which had 76 pilots training with PTCI and is owed up to $1.9m (€1.54m), was also concerned about the manner of the company's trading in recent months. Kelley Smith BL, for the airline, said it might be necessary to write to the directors of the company about this.

Mr Justice McGovern said his only function at this stage was to decide whether to confirm the appointment of the examiner on the basis that the company had a reasonable prospect of survival which would ensure creditors, including the 350 students, would get something rather than nothing if the company was wound up.

He was absolutely mindful of the plight in which students and their families found themselves financially and it terms of their careers.

Some of the issues raised by the parents may be a matter, backed up by evidence, for the Director of Corporate Enforcement, he said. But they were not relevant to what the court was dealing with in terms of the examinership.

The judge was told by Mark O'Mahony BL, for PTCI, said the restructuring of the company under the survival plan will include reduction in pay for 16 employees whose jobs will be saved, as well as a cut in the rent. The company did have the ability to fund itself through the period of examinership and would discharge all liabilities of PRSI and PAYE to the Revenue who the court heard were neutral on the examinership application.

Bernard Dunleavy BL, for the examiner, said his client had a number of concerns which would warrant close scrutiny during the examinership. These included the need to have the suspension of PTCI's operating licence by the IAA lifted as part of any survival scheme, counsel said.

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