It is no real surprise Kieran Wallace, the KPMG partner appointed as examiner to Norwegian Air Shuttle (NAS) and four Irish subsidiaries last November, is going to seek a further 50 days to work on rescuing the Scandinavian airline group.
NAS and its Irish companies – Arctic Aviation Assets, Norwegian Air International, Drammensfjorden Leasing Ltd and Lysakerfjorden Leasing Ltd – sought High Court protection from creditors in this jurisdiction as the Irish subsidiaries held its aircraft.
Wallace, appointed when the companies succeeded in getting court protection, will have been examiner for 100 days on February 25th. The legislation allows him apply for a further 50 days, which he will do this Friday.
Sources believe Mr Justice Michael Quinn is likely to grant the extension. Wallace still has several key steps to take before getting to the point where he can present a "scheme of arrangement" – legal speak for a rescue plan – to the High Court for its approval. Those steps will include convening creditors' meetings against the background of Covid-19 restrictions imposed by our own and other governments.
Terminating leases
A key issue for NAS itself is terminating leases on aircraft held by the Irish companies and returning them. Its lawyers recently signalled that it wanted to do this with 36 jets, but on Monday, the High Court heard that the airline had reached settlements with lessors, including Avolon, SMBC Aviation Capital, Orix, Aviation Capital Group and others, relating to 21 aircraft.
The court will hear applications to repudiate leases covering the remaining planes, along with service contracts with various other suppliers on February 23rd. It is possible that more creditors will have agreed deals by then, but a few leases are likely to remain, so that hearing itself could take days.
Asking the court to repudiate the leases will be complex, as they involve the agreements themselves, guarantees and other contracts. They also involve several parties, namely the airline subsidiaries, lessors, banks and other entities. This is a long-haul journey, the like of which the Norwegian airline has never before experienced.