Cityjet in new battle for survival as hostile Danish takeover looms

CityJet, the Dublin-based regional airline specialising in wet-lease services, is embroiled in a critical battle for survival as it navigates its third examinership in 33 years.

The airline is pushing back against a contentious takeover bid and navigating disputes over maintenance, repair, and overhaul (MRO) prepayments that potentially threaten its future.

CityJet’s sole shareholder, Strategic Alliance of Regional Airlines (SARA), which is 80% owned by Air Investment Valencia, is fiercely opposing a takeover proposal from a Danish company led by Lars Thuesen, head of Jettime, another wet-lease operator.

The bid, revealed earlier this month, would see Danish CityJet Holding acquire 92% of CityJet’s shares, with Irish firm EIC Aircraft Leasing taking the remaining 8%, leaving existing shareholders, including SARA, with nothing. SARA, having invested €7.5 million in CityJet over the past three years, has challenged the plan’s validity, labelling its financial projections as overly optimistic, and the dispute has been sent to to the Irish Supreme Court for a final decision.

The airline, which provides aircraft, crew, maintenance, and insurance (ACMI) services to carriers like Scandinavian Airlines (SAS), entered examinership in May 2025 after losing a €13 million Lufthansa contract set to expire in October. This loss, combined with €13.2 million in short-term liabilities against only €7.7 million in cash reserves, has pushed CityJet to the brink.

Joint examiners Kieran Wallace and Andrew O’Leary of Interpath Advisory are tasked with devising a rescue plan within a 100-day court-protected period, but their efforts are complicated by demands from contractors for upfront MRO prepayments.

These proposed contractual changes, which the examiners argue could derail the restructuring, prompted them to seek High Court declarations on 20 August to invalidate the amendments, citing their material impact on CityJet’s ability to continue in examinership. The court’s ruling, expected soon, will be pivotal.

SARA’s resistance to both the takeover and the MRO demands underscores the fragility of CityJet’s financial structure. The airline, which employs 124 people in Ireland and England and 461 in Scandinavia, faces a potential shortfall of €177 million for creditors if liquidated, according to an independent report by Damian Murran of Teneo Restructuring Ireland.

The report, however, suggests a reasonable prospect of survival if costs are cut, debt is restructured, and new investment is secured. Air Investment Valencia, controlled by businessman Carlos Bertomeu, has been mooted as a potential investor, but negotiations remain complex. The examiners have until mid-September to finalise a rescue plan, with the Supreme Court’s decision on the takeover bid likely to shape the airline’s fate.

CityJet’s reliance on wet-lease contracts, particularly with SAS, highlights the high risks of its business model in the volatile aviation industry. The outcome of these legal and financial battles will not only determine CityJet’s future but also signal the viability of restructuring processes for regional airlines across Europe.