Airline rescue plan approved despite shareholder opposition as court finds scheme offers better outcome than liquidation

The High Court approved proposals for a scheme of arrangement enabling an airline company to avoid liquidation and continue as a going concern following an application by joint examiners. The court found that the proposed scheme, backed by new majority and minority investors, would provide a better outcome for unsecured creditors than liquidation, principally due to additional investment and operational cost savings, and was not unfairly prejudicial to dissenting creditors. Objections from the former shareholder group and its affiliates—who claimed the scheme undervalued certain assets and that the company had little prospect of survival—were rejected. The judgment emphasised the robust evidence of ongoing support from the company’s largest customer, new financial backers, and confirmed cost savings as key reasons for determining that the company had a reasonable prospect of survival under the scheme.