Struggling Central European budget carrier SkyEurope Airlines has disclosed that it requires a capital injection of €15-20 million, and is facing increasing pressure from creditors.
SkyEurope has managed to cut operating losses over the first half but it remains in a weak financial position, with low cash reserves.
Chief executive Jason Bitter admits to ATI that only preliminary discussions have been held with potential investors. He says: "'Negotiating' implies something a lot more advanced than where we're at."
While backer York Capital has repeatedly rolled over a €25 million loan, other creditors are not as relaxed. Czech firm Beyond Interactive, which has handled SkyEurope's marketing in the Czech Republic, Slovakia and Romania, launched a public campaign appealing to SkyEurope's creditors in a bid to apply collective pressure.
"Unfortunately all the promises from SkyEurope that the debt will be settled went wrong so we decided to go ahead and search for creditors so that we can...proceed with insolvency procedures," says Beyond Interactive parent GroupM's regional head David Lhota.
While SkyEurope owes Beyond Interactive a little under €400,000, he says, the total debt is higher as there have been "many responses" to the creditor campaign.
Lhota says that legal proceedings are "absolutely" ready to go ahead but, for now, are on hold after a payment schedule was arranged with the airline.
"We have agreed that SkyEurope is due to pay certain instalments within certain periods of time and so far they are following that," he says. "But as soon as this agreement isn't followed we shall proceed with the legal steps."
SkyEurope chief Bitter says shareholder Focus Capital estimates the carrier's investment requirement at about €15 million. Focus holds 9.74% of SkyEurope and could increase its stake.
Bitter says that there has been "no significant change" in SkyEurope's cash position. The carrier claimed in its first-half results that short-term liquidity needs were "adequately financed".
SkyEurope currently operates a fleet of 10 aircraft, comprising two owned Boeing 737-700s, two 737-700s leased from Dubai Aerospace, and a mix of dry- and wet-leased older 737 models.
Source: Air Transport Intelligence news
