I wanted to pick everyone's brains and gauge opinions of how we (the industry) manage airline insolvency and bankruptcy. Why we are never consulted or told before it happens, but then it just happens suddenly, and repatriation flights are leased.
I was wondering what people thought about the CAA taking ownership of companies that they regulate, and who to complain to if there are non-compliance or safety concerns during that period.
If you look into the company
ATT RE MAEL Ltd that is registered at aviation house, you will see that it is owned by CAA officials in their capacity as trustees of the Air Travel Trust. This company is being used to hold the equity of another company Monarch Aircraft Engineering Ltd (MAEL) that the CAA took as part of a CVA process.
The CVA was required because Monarch Aircraft Engineering was insolvent and it could no longer operate safely to purchase tooling, equipment and spares, but it needed to be broken up and sold to allow the customers MAEL served to continue flying.
The CVA saw CAA Officials taking 14943 preference shares of MAEL, that were kept in the company ATT RE MAEL Ltd, which allowed the CAA to rank higher for dividends payments, but also for issuing winding up orders than the ordinary shares owned by Petrol Jersey Ltd (an investment vehicle for Greybull Capital.)
I do not think it is right that the CAA became shareholders in a company that they regulate, because there is a clear conflict of interest. Any complaints of non-compliance or safety issues implicate the CAA who not only have regulatory responsibility, but also the added responsibilities as shareholders of a company that ranks highest for the issue of a winding up order.
I am going to throw it out there, I think the breaking up of MAEL was not as safety oriented as it should have been. Furthermore I think it is unacceptable for a Regulator like the CAA to wind up a company without consulting employees. I expect to be screwed over by an unscrupulous airline wanting to maximise profits for shareholders, and for a collapsing airline not to be consult employees about about transfers of employment and redundancies. But I think that it is simply unethical for a regulator to behave in this manner.
If you read Monarch Aircraft Engineering Ltd Employment Tribunal judgments you will see that NDA's were used to hide how the company was being broken up and sold from employees.
Loosing a job is a stressful part of life, but there are employment rights to redundancy consultations for a reason, to soften the blow. This consultation gives you time to apply for a new job, and takes away an element of stress and pressure.
My personal view is that it is unethical to use NDA to take away employees consultation preparation time to force restructuring upon employees immediately, which may require employees to sign new contracts, or take unfavourable alternative jobs, or be made redundant with no notice. I do not think the CAA should be owning shares in a company behaving in that way, even if it is in the interest of airworthiness and keeping passengers flying. It is unethical behaviour for a regulator.
What do you guys think?