Originally Posted by
pholling
The problem is the airline cannot be in the control of administrators for any period of time. The CAA is obligated by law to suspend an AOC of an airline in administration. The pre-pack would have to see the airline transferred to other 'fit and proper' owners prior to the admiration proceedings. Of course this is separate from the issue with the ATOL license, which is not directly related to the AOC. It is possible for the travel arm to end up in administration, but the airline does not. However, if the travel arm is a real mess it could lead the airline into insolvency. Not saying it is going to or even likely to happen, but there are permutations where it could.
This is absolutely correct. A pre-pack administration would have to also take into account which and what parts of the group have the biggest net liabilities, how those liabilities are then distributed, and more very complex financing and accounting regulations rules. It is by no means straight forward at all.
Take the recent House of Fraser example... Company was trading, Mike Ashley showed an interest, but didn't bid. Company went into administration, within hours Mike Ashley picks it up for his original interest price. As was said by
pholling , Thomas Cook Group would effectively have to be insolvent first before a pre-pack could kick in, which would forfeit the AOC and ATOL licence.