Well, that’s one idiocy less

I was astonished to find that T Cook planes couldn’t be used to bring T Cook peeps back. Because planes owned by a bankrupt company can’t be used. I even asked the CAA about this and they muttered summat about not us Guv.

Planes owned by failed airlines would be used to repatriate passengers under plans announced by the government.

Proposed legislation would enable collapsed carriers to be placed in special administration, meaning their aircraft and crew can continue flying to bring customers back to the UK.

Under the existing system, when an airline folds its planes are grounded, leaving passengers at risk of being stranded.

There does seem a certain sense being deployed here.

14 comments on “Well, that’s one idiocy less

  1. ‘… meaning their aircraft and crew can continue flying to bring customers back to the UK.‘

    Astonishing?

    What suppliers anywhere will continue to supply a company in financial difficulties or in bankruptcy except cash in advance, and not at all unless money owing is paid first? How will the planes get off the ground without fuel and airport services for which T Cook can’t pay?

    In any case, aren’t planes of bankrupt airlines likely to be impounded due to local legal injunctions by creditors for monies owing, eg: airport landing fees, fuel, catering, service, transportation companies, crew hotels?

  2. John B. Companies continuing to supply services in administration proceedings is not really uncommon. It can actually be in the best interest for all involved that they do so. Even happens all the time to airlines (Alitalia is one recent example.)

  3. I think the trains run along those lines. I don’t know the details but it is something like this: the operators must lease them from a lessor nominated by the Department of Transport. If the operator goes bust, the lease is automatically transferred back to the Dept. So the trains still run in the morning.

  4. “…Because planes owned by a bankrupt company can’t be used…..”

    No time to check everything – but I guess that the minute a company goes bankrupt, ALL its bills are likely not to be paid. In the case of an aircraft, these include the landing fees and fuel bill – which are probably held on an account owed to that airport.

    So it makes sense for the airport to impound the aircraft until those moneys are paid by the administrators. The only way the aircraft could be used to ferry passengers back would be if someone stepped in and paid the airport – and any other airport the aircraft touched down on during the repatriation flight…

    It does sound as if it’s a bit more complicated that simply saying: “Here’s an aircraft…”…

  5. I am reminded of an incident that happened here in Canada.

    A foreign airline/tour operator went bust, a creditor applied to the local authorities for a writ. The Sheriff arrived to seize/place a lien on said aircraft. The local representative of said airline produced papers to prove that said aircraft were leased, and not the property of said (now bankrupt), airline, and since they were not property of said airline, were not liable to seizure.

    The sheriff, reached under a random seat, and removed the life-jacket, which had the name of the (now bankrupt), airline stenciled thereon. Since these were clearly the property of the named entity, he seized these instead. Without life-jackets, the plane could not legally fly anywhere overseas anyway, so he had effectively seized the aircraft anyway.

    I suspect something similar affects most of the Thomas Cooke fleet, and that they are effectively useless until some arrangements are made re: landing fees/outstanding fuel bills etc. are sorted……

  6. A very good friend’s former gf was a trolley dolly for Monarch long before it went bust. Apparently it was quite common in the industry for pilots of financially dodgy airlines to fly with suitcase’s full of cash as airports wouldn’t accept their credit.

  7. It would make sense – and it was the first thing I thought of when I heard the reports of the difficulties getting people back – there’s the ‘planes and crew sat there doing nothing else.

    But I’m guessing there’s a bankruptcy / asset security issue here. Even if the British government insisted that they could fly out of the UK, as soon as they touch down in another country to pick up the stranded passengers, they’d be under that country’s law and would have a lien slapped on them for any debts in that country.

    Presumably this could be done with some sort of international agreement, to allow governments to basically commandeer the aeroplanes – I guess with a commitment to subsequently fly them back to wherever they had been at the time they did so, so that any seizures for unpaid debts would reapply. But without an international agreement? Possibly, if they were under government control so under some sort of sovereign immunity? But difficult to do anything quickly, I’d have thought.

  8. There are ALL SORTS of legal issues to consider here.

    For example, the passengers who are stranded are customers of the bankrupt airline, and hence are in a legally-defined queue when it comes to being recompensed. Shipping them back to the UK is, of course, recompense for the outstanding debt the company owes them.

    There is a very well established legal structure for arranging the queue of creditors in bankruptcy. Unsecured customers come last in the line. This proposal would radically change that. I wonder what effect that would have on our bankruptcy laws generally?

  9. Pme of the key reasons the CAA grounds aircraft in these cases is safety – are all the maintenance engineers turning up and are they all doing their jobs properly once the airline fails? Have the outsourced maintenance companies pulled their services? Has the airline been skimping on maintenance in the the last few weeks before it goes under? And most lessors are very unhappy at their assets being glien in such situations, and so ground their aircraft just in case.

  10. The problem is the AOC (Air Operator Certificate).

    This lapses the moment the company goes bankrupt and immediately voids the insurance in the aircraft and the company’s licence to operate in the airspace of any other nation, as well as all its essential engineering and other certificates.

    Even if not seized by a creditor, any of their aircraft cannot fly unless transferred to the ownership of, or to a wet lease of, another company possessing an internationally recognised AOC.

  11. The taxpayer already pays for this stuff anyway. The CAA’s repatriation efforts cost a fortune. Given that the aircraft are already in place where those who need to be repatriated are currently located, paying the bills for the failed airline and effectively becoming the company in administration or liquidation for a short period seems like a less expensive way out for the taxpayer.

  12. A simple(ish) solution would be to insert into UK law that the lease of an aircraft to a UK airline temporarily reverts to the CAA or the CAA’s designated operator so that the aircraft can be repatriated at the CAA’s discretion, and that an aircraft owned by a UK airline is temporarily leased by the administrators/liquidators ditto.

    The lessors/administrators/liquidators would probably be in favour of such a scheme because it means their assets would mostly be returned to the UK where they will have to deal with only one legal jurisdiction, at a cost to them of a few flying hours on the plane.

    With transfer of operator, the aircraft couldn’t be impounded by foreign airports; fuel and any immediate necessary servicing would be paid by the CAA or its operator, any maintenance required for the plane to fly being billed on by the CAA to the lessor or added as a lien to the aircraft in the case of it being owned by the administrator or liquidator. The benefit to the CAA in this case would be that they only need to pay for fuel/crew in one direction rather than flying a round trip with an empty plane on the outward leg.

    Aviation law is very strict, so just flying the aircraft as-is is not something that could “just be done” but as a change to the administration/liquidation process, this should present a fairly easy win for UK govt: it’d be doable with an SI. I would expect that once the UK had passed such a law, other countries with similar concerns (looking at you, Germany) would probably instigate similar rules.

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