User avatar
hvusslax
Topic Author
Posts: 403
Joined: Sat Aug 15, 2015 7:35 pm

Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 12:49 pm

Air Berlin flight AB3928 landed at KEF at 22:35 UTC last night. The A320 (D-ABDX) was directed to a remote stand at the airport's eastern apron which is far from the passenger terminal. Snowploughs are parked around the aircraft. Most of the passengers on the outbound flight accepted Air Berlin's offer to fly into TXL instead.

ISAVIA, the operator of KEF airport, will not comment on the amounts owed to them by Air Berlin other than these are "significant" amounts. As of noon today there had been no response from Air Berlin.

https://www.isavia.is/english/news/isav ... arges/1658
 
LGAviation
Posts: 865
Joined: Thu Jul 30, 2015 10:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 12:49 pm

AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.
2018: ADD CPH DAR DEN DME DUB FRA HAH HAM IST JIB KEF LYR MEL OSL PEK PKC PVG RAK STN SVO SYD YVR
 
faxiTMA
Posts: 55
Joined: Wed Jan 07, 2009 7:23 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 1:15 pm

 
mjoelnir
Posts: 9388
Joined: Sun Feb 03, 2013 11:06 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 1:30 pm

LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.


Nonsense, as long as AB is operating they have to pay everything and that immediately. Having declared bankruptcy does not allow them to incur additional debt.
 
Newbiepilot
Posts: 3640
Joined: Tue Aug 30, 2016 10:18 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 1:41 pm

LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.


I don't understand how all of this works. From a laymans perspective, I don't see why Air Berlin should be allowed to continue to use facilities at KEF airport if they are not paying. I don't understand how insolvency means they can fly without paying their bills to airports.
 
LGAviation
Posts: 865
Joined: Thu Jul 30, 2015 10:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 2:07 pm

mjoelnir wrote:
LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.


Nonsense, as long as AB is operating they have to pay everything and that immediately. Having declared bankruptcy does not allow them to incur additional debt.


Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.
If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.
2018: ADD CPH DAR DEN DME DUB FRA HAH HAM IST JIB KEF LYR MEL OSL PEK PKC PVG RAK STN SVO SYD YVR
 
CXA330300
Posts: 1318
Joined: Wed May 26, 2004 5:51 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 2:09 pm

LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.


Even then, bankruptcy and insolvency law differ across the EU and EEA member states. Iceland in particular is not subject to certain EU laws, and companies are still responsible for different obligations in different countries. Similar things happened with TW in Israel a number of years ago.
Home airport now: DCA/IAD
 
User avatar
hongkongflyer
Posts: 778
Joined: Tue Oct 28, 2014 8:23 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 2:33 pm

Newbiepilot wrote:
LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.


I don't understand how all of this works. From a laymans perspective, I don't see why Air Berlin should be allowed to continue to use facilities at KEF airport if they are not paying. I don't understand how insolvency means they can fly without paying their bills to airports.


No party will be suffered (losing money) from the products / services they provided to AB after AB's insolvency.
For this case, the amount due from AB for using KEF's facilities are among one of the top priority to be repaid by AB's assets,
but not including the amount incurred before the insolvency.
 
mjoelnir
Posts: 9388
Joined: Sun Feb 03, 2013 11:06 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 2:37 pm

LGAviation wrote:
mjoelnir wrote:
LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.


Nonsense, as long as AB is operating they have to pay everything and that immediately. Having declared bankruptcy does not allow them to incur additional debt.


Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.

If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.


AFAIK the claim is for cost run up after the declaration of bankruptcy. And grounding the frame, like grounding a ship, is the typical answer, if you have unpaid cost in a foreign country.
 
LGAviation
Posts: 865
Joined: Thu Jul 30, 2015 10:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 2:43 pm

mjoelnir wrote:
LGAviation wrote:
mjoelnir wrote:

Nonsense, as long as AB is operating they have to pay everything and that immediately. Having declared bankruptcy does not allow them to incur additional debt.


Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.

If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.


AFAIK the claim is for cost run up after the declaration of bankruptcy. And grounding the frame, like grounding a ship, is the typical answer, if you have unpaid cost in a foreign country.


Reuters says that the claims are from before the declaration. https://www.reuters.com/article/air-ber ... SL8N1MV3P2
2018: ADD CPH DAR DEN DME DUB FRA HAH HAM IST JIB KEF LYR MEL OSL PEK PKC PVG RAK STN SVO SYD YVR
 
raylee67
Posts: 795
Joined: Mon Oct 24, 2011 11:06 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 3:30 pm

Whether the practice is legal or not or reasonable or not, this may prompt other overseas creditors to do the same in a rush to secure their share of what AB owes them, before there is no assets left to be impounded. To avoid such a scenario which would derail the orderly proceeding of liquidation, the Court should order AB to cease all operations immediately, at least all operations outside of Germany.
319/20/21 332/33 342/43/45 359/51 388 707 717 732/36/3G/38/39 74R/42/43/44/4E/48 757 762/63 772/7L/73/7W 788/89 D10 M80 135/40/45 175/90 DH1/4 CRJ/R7 L10
AY LH OU SR BA FI
AA DL UA NW AC CP WS FL NK PD
CI NH SQ KA CX JL BR OZ TG KE CA CZ NZ JQ RS
 
TwinFlyer
Posts: 3
Joined: Sun Aug 13, 2017 11:55 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 3:37 pm

LGAviation wrote:
Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.
If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.


This isn't a case of bankruptcy, liquidation and who has rights to payments etc. This is about one company (KEF) protecting itself against unpaid fees and charges.

EU law (in most countries) allows the detention of an airframe irrespective of who owns it in order to recover unpaid fees. I haven't checked the facts, but my guess is that this A320 isn't owned by Air Berlin, so if the operator doesn't pay for the release of the frame before their demise, the bank/owner of the aircraft will have to pay to get it out of KEF. Good move on their part.

I've been involved in a case like this recently (albeit, not relating to anything as big as an A320), you'd be amazed how much power is granted to creditors in this situation.
 
Interflug74
Posts: 29
Joined: Sun Jun 02, 2013 10:53 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 3:48 pm

Why snowploughs? Like one will enter the plane and leave without clearance from ATC? Simply start between two slots, straight over the green ..;-)
 
User avatar
Finn350
Posts: 1601
Joined: Tue Jul 09, 2013 4:57 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 3:48 pm

LGAviation wrote:
Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.
If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.


I don't think that Icelandic operator is denying the fact that AB bankruptcy proceedings are conducted in Germany under German law. However, the question here is a bit different, and AB estate or the lessor has to argue the release of the plane in Icelandic courts. I don't think German court has jurisdiction to order the release of the plane confiscated by an Icelandic operator.
 
User avatar
readytotaxi
Posts: 7083
Joined: Mon Dec 11, 2006 2:09 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 3:55 pm

So, if the leasing company turn up with a crew and claim their property what would happen?
you don't get a second chance to make a first impression!
Growing older, but not up.
 
LGAviation
Posts: 865
Joined: Thu Jul 30, 2015 10:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:02 pm

Finn350 wrote:
LGAviation wrote:
Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.
If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.


I don't think that Icelandic operator is denying the fact that AB bankruptcy proceedings are conducted in Germany under German law. However, the question here is a bit different, and AB estate or the lessor has to argue the release of the plane in Icelandic courts. I don't think German court has jurisdiction to order the release of the plane confiscated by an Icelandic operator.


Difficult to say, the situation from a German perspective is pretty clear that it is unlike otherwise argued above a matter of insolvency law and insolvency law only. Under the German insolvency code (§ 89 InsO), the insolvency court virtually gains complete jurisdiction over all claims against the company in question and is obliged to deny the enforcement of most such claims to protect other creditors in order to ensure that neither of them is in advantage because they moved in quicker. The owner of the aircraft apparently is Singapore based and that would be a different matter before the Icelandic courts. Regarding the original seizure though, German law will most certainly not honour any judgments out of Iceland and action against Isavia for damages for them preventing the use of the aircraft for this claim might be successful.
2018: ADD CPH DAR DEN DME DUB FRA HAH HAM IST JIB KEF LYR MEL OSL PEK PKC PVG RAK STN SVO SYD YVR
 
User avatar
JetBuddy
Posts: 2533
Joined: Wed Dec 25, 2013 1:04 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:08 pm

readytotaxi wrote:
So, if the leasing company turn up with a crew and claim their property what would happen?


If a repo crew shows up, they can't go anywhere. That's why the two snowplows are parked there. They'd have to pay the amount owed to KEF first.
 
dtw2hyd
Posts: 7946
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:13 pm

readytotaxi wrote:
So, if the leasing company turn up with a crew and claim their property what would happen?


All other vendors have to give up their rights under Cape Town Treaty and release the plane.

Edit: Iceland is not a Cape Town Treaty signatory. Local laws apply.
Last edited by dtw2hyd on Fri Oct 20, 2017 4:25 pm, edited 1 time in total.
 
Sooner787
Posts: 2656
Joined: Thu Jul 18, 2013 1:44 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:14 pm

readytotaxi wrote:
So, if the leasing company turn up with a crew and claim their property what would happen?


I remember watching a TV show about Nick Popovich and his repo company and IIRC , when they came to repo a plane,
they would pay whatever fees the local airport or FBO were owed to buy their cooperation in completing the repo safely.
 
eaa3
Posts: 943
Joined: Mon Sep 10, 2007 4:49 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:19 pm

LGAviation wrote:
Finn350 wrote:
LGAviation wrote:
Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.
If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.


I don't think that Icelandic operator is denying the fact that AB bankruptcy proceedings are conducted in Germany under German law. However, the question here is a bit different, and AB estate or the lessor has to argue the release of the plane in Icelandic courts. I don't think German court has jurisdiction to order the release of the plane confiscated by an Icelandic operator.


Difficult to say, the situation from a German perspective is pretty clear that it is unlike otherwise argued above a matter of insolvency law and insolvency law only. Under the German insolvency code (§ 89 InsO), the insolvency court virtually gains complete jurisdiction over all claims against the company in question and is obliged to deny the enforcement of most such claims to protect other creditors in order to ensure that neither of them is in advantage because they moved in quicker. The owner of the aircraft apparently is Singapore based and that would be a different matter before the Icelandic courts. Regarding the original seizure though, German law will most certainly not honour any judgments out of Iceland and action against Isavia for damages for them preventing the use of the aircraft for this claim might be successful.


The fact is that Icelandic law allows ISAVIA to do this. The plane is in Iceland, and as such, it doesn't matter at all what non-Icelandic courts have to say. The question of whether the plane will leave or not is entirely up to Icelandic courts and law. That's the beauty of sovereignty. So, I don't think this plane is going anywhere unless the claim is paid.
 
LGAviation
Posts: 865
Joined: Thu Jul 30, 2015 10:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:19 pm

eaa3 wrote:
LGAviation wrote:
Finn350 wrote:

I don't think that Icelandic operator is denying the fact that AB bankruptcy proceedings are conducted in Germany under German law. However, the question here is a bit different, and AB estate or the lessor has to argue the release of the plane in Icelandic courts. I don't think German court has jurisdiction to order the release of the plane confiscated by an Icelandic operator.


Difficult to say, the situation from a German perspective is pretty clear that it is unlike otherwise argued above a matter of insolvency law and insolvency law only. Under the German insolvency code (§ 89 InsO), the insolvency court virtually gains complete jurisdiction over all claims against the company in question and is obliged to deny the enforcement of most such claims to protect other creditors in order to ensure that neither of them is in advantage because they moved in quicker. The owner of the aircraft apparently is Singapore based and that would be a different matter before the Icelandic courts. Regarding the original seizure though, German law will most certainly not honour any judgments out of Iceland and action against Isavia for damages for them preventing the use of the aircraft for this claim might be successful.


The fact is that Icelandic law allows ISAVIA to do this. The plane is in Iceland, and as such, it doesn't matter at all what non-Icelandic courts have to say. The question of whether the plane will leave or not is entirely up to Icelandic courts and law. That's the beauty of sovereignty. So, I don't think this plane is going anywhere unless the claim is paid.



That's probably the answer for all practical purposes. The second part of the answer is they will get paid from airberlin their insolvency quota and no penny more. The beauty of sovereignty in this case might be hampered by the fact that the Lugano convention and other agreements provide for that court rulings from Germany are generally enforceable in Iceland but I am not seeing anything of this happen from the airberlin part. It will be upon the owners to resolve the issue and most likely that will involve payment of some sort.
2018: ADD CPH DAR DEN DME DUB FRA HAH HAM IST JIB KEF LYR MEL OSL PEK PKC PVG RAK STN SVO SYD YVR
 
eaa3
Posts: 943
Joined: Mon Sep 10, 2007 4:49 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:22 pm

Interflug74 wrote:
Why snowploughs? Like one will enter the plane and leave without clearance from ATC? Simply start between two slots, straight over the green ..;-)


Plus, the plane is sitting at an airport, a highly access restricted area. Access to the plane is governed by ISAVIA and the police. If someones tries to take it back, they'll simply be arrested for treaspassing on airport property.
 
sk736
Posts: 728
Joined: Tue Aug 08, 2006 4:47 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:23 pm

Icelandic law applies in Iceland. End of.
 
superjeff
Posts: 1310
Joined: Fri Feb 05, 2010 2:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:27 pm

mjoelnir wrote:
LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal. At the moment I am not certain which measures AB could use to enforce German law in this situation given that it is their only choice and that Iceland as an EEA member state should accept that it is the applicable law governing the insolvency proceedings. The only way out otherwise that I see might be if Lufthansa decides to foot the bill to ensure a smooth transition.


Nonsense, as long as AB is operating they have to pay everything and that immediately. Having declared bankruptcy does not allow them to incur additional debt.



Not totally sure of German law in this case, but in the event of an insolvency, generally debt is divided into Pre and Post filing. Pre filing debt cannot be paid without approval of the appropriate agency (i.e., Bankrutpcy Court); post-filing can be paid, unless otherwise prohibited by the governing agency. In this case, if Iceland is in either in the EU or party to a treaty with Germany, they would be due payment for post-filing bills as accrued, which might mean immediate payment of current bills required. If Iceland is not in the EU (I don't know that they are) or party to a treaty with Germany governing such situations, then they can probably do whatever they want.

I am an attorney and I do have some U.S. bankruptcy experience, but am not a German attorney and have no idea as to the specifics of German bankruptcy laws.
 
WIederling
Posts: 9292
Joined: Sun Sep 13, 2015 2:15 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:43 pm

LGAviation wrote:
AB legally cannot pay under insolvency proceedings and under a German law standpoint the grounding of the aircraft is illegal.


IMU that is not quite correct.
The "Insolvenzverwalter" has been tasked with continuing to provide transport service.
for that task €150m have been provided to facilitate that.

going by the "significant amounts due" quip I'd assume that there are
two items to the open bill:
1: the fees for this aircraft going through KEF once ( this is handled from those €150m )
2: fees accumulated and not paid ( with probably rather recent invoicing on a monthly schedule ?)
from the past.

for the fees open from the past KEF has to queue up like everybody else to get their
cut of the cookie remains.

pos #1 will be paid from pocket money ( i.e. those €150m )
Murphy is an optimist
 
User avatar
hvusslax
Topic Author
Posts: 403
Joined: Sat Aug 15, 2015 7:35 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 4:45 pm

Statement from Isavia:

Update Oct 20 2017, 16:04:


The grounding of the Air Berlin aircraft in Iceland is lawful according to Icelandic law

In reply to Air Berlin’s statements in the German media:

Isavia’s actions with regards to the grounding of the Air Berlin aircraft at Keflavik Airport are legal according to Icelandic law. Obligations undertaken in Iceland are subject to Icelandic law. German law are not applicable in Iceland.

The actions are in accordance with the Icelandic Aviation Act, Article 136, which reads as follows:

„The Civil Aviation Administration and providers of aerodrome or aviation services may prevent an aircraft from taking off until such time as all fees for the aircraft in question or other operations of the owner or user of the aircraft have been paid or security has been posted for such payment.“

Isavia provides services for airlines, as all airport operators. The airlines operating at Keflavik Airport have an obligation to pay for these services according to the fee structure in place and agreements that they have undertaken. Air Berlin should already have taken these costs into account by including them in their ticket prices.

Isavia wants to emphasize that its actions focuses only on one aircraft and Isavia will not take any such action against other Air Berlin aircraft.
 
User avatar
Finn350
Posts: 1601
Joined: Tue Jul 09, 2013 4:57 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:03 pm

It is basically a legal deadlock: German law doesn’t allow preferential payment of pre-banktruptcy debts and Icelandic law allows the airport operator to keep the aircraft until the pre-bankruptcy debt has been settled. In the end it is probably the leasing company in whose interest it is to settle the debt to get their plane back. The leasing company will add that to their claims from the estate, but they will get only a fraction of their claims back from the estate.
Last edited by Finn350 on Fri Oct 20, 2017 6:20 pm, edited 1 time in total.
 
32andBelow
Posts: 4289
Joined: Mon Sep 03, 2012 2:54 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:09 pm

Finn350 wrote:
It is a basically a legal deadlock: German law doesn’t allow preferential payment of pre-banktruptcy debts and Icelandic law allows the airport operator to keep the aircraft until the pre-bankruptcy debt has been settled. In the end it is probably the leasing company in whose interest it is to settle the debt to get their plane back. The leasing company will add that to their claims from the estate, but they will get only a fraction of their claims back from the estate.

Well maybe there will be a snow storm and they will be able to get the plane out.
 
LGAviation
Posts: 865
Joined: Thu Jul 30, 2015 10:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:12 pm

32andBelow wrote:
Finn350 wrote:
It is a basically a legal deadlock: German law doesn’t allow preferential payment of pre-banktruptcy debts and Icelandic law allows the airport operator to keep the aircraft until the pre-bankruptcy debt has been settled. In the end it is probably the leasing company in whose interest it is to settle the debt to get their plane back. The leasing company will add that to their claims from the estate, but they will get only a fraction of their claims back from the estate.

Well maybe there will be a snow storm and they will be able to get the plane out.


Or they might try and defeat the mighty Icelandic air force :D Just booked myself my last AB flight for next week. I bet in the end it will indeed only between the lessor and the Icelanders. Somehow feels like Kaupthing Bank reversed this case.
2018: ADD CPH DAR DEN DME DUB FRA HAH HAM IST JIB KEF LYR MEL OSL PEK PKC PVG RAK STN SVO SYD YVR
 
abrelosojos
Posts: 4292
Joined: Sun May 29, 2005 6:48 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:21 pm

LGAviation wrote:
Okay I see how my earlier answer might have led to confusion.

It is an international principle of law that generally the law of the home jurisdiction of the company applies to its insolvency proceedings. Within the European Union (though apparently admittedly not including the European Economic Area of which Iceland is part) this is ensured by EU Regulation 2015/848 Art. 3, 6, 7 which leads us to German law in this case.
Under German law, a cut is made on the day that insolvency is filed and all earlier claims can no longer be enforced but need to be submitted for the insolvency table. After liquidation, a quota is calculated and paid out to the creditors (which is usually very low). This is the category in which the Icelandic claims fall.
If the administrator decides that he wants to continue operations, this protection does not apply to claims arising after this point of time. Keflavik Airport was under no obligation to continue to allow AB at its facilities but enforcing earlier claims is a violation of German law which might see them themselves subjected to damages claims from Germany for wrongful enforcement which might be enforceable in Iceland under the Lugano convention.
Also, I don't really see the point in grounding an aircraft owned by a third party in Singapore which should be easily able to retrieve it. AB won't and can't lift a finger.



= Huh? Again, German law is irrelevant. As stated below:


dtw2hyd wrote:

All other vendors have to give up their rights under Cape Town Treaty and release the plane.

Edit: Iceland is not a Cape Town Treaty signatory. Local laws apply.


Saludos,
Alex
Live, and let live.
 
dtw2hyd
Posts: 7946
Joined: Wed Jan 09, 2013 12:11 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:42 pm

I will say this aloud. Kudos to Iceland for standing up for other vendors and for not signing this crappy treaty. No one knows how these signatories signed, maybe they were drunk.
 
willd
Posts: 144
Joined: Thu Nov 13, 2008 8:38 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:46 pm

Correct me if I am wrong but Air Berlin is actually a company registered in England and Wales. A quick search on the UK Companies House website shows this to be the case, as does the fact that the correct name for the airline is Air Berlin plc.

Given that, surely we should be discussing the insolvency laws of England and Wales rather than people, who I expect aren't insolvency and restructuring lawyers or accountants at major international law firms or one of the big four accountancy firms, commenting on the laws of gErmany.
 
User avatar
Finn350
Posts: 1601
Joined: Tue Jul 09, 2013 4:57 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:54 pm

I suppose the bankrupt company is Air Berlin PLC & Co. Luftverkehrs KG registered in Germany, and Air Berlin PLC is a general partner to that company.

https://www.airberlin.com/en/site/impressum.php
Last edited by Finn350 on Fri Oct 20, 2017 6:58 pm, edited 2 times in total.
 
LGAviation
Posts: 865
Joined: Thu Jul 30, 2015 10:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 6:55 pm

willd wrote:
Correct me if I am wrong but Air Berlin is actually a company registered in England and Wales. A quick search on the UK Companies House website shows this to be the case, as does the fact that the correct name for the airline is Air Berlin plc.

Given that, surely we should be discussing the insolvency laws of England and Wales rather than people, who I expect aren't insolvency and restructuring lawyers or accountants at major international law firms or one of the big four accountancy firms, commenting on the laws of gErmany.


Airberlin plc is indeed incorporated under the laws of the UK. Airberlin itself though is organised in the form of Airberlin PLC & Co. Luftverkehrs KG (a German limited liability partnership in which the English plc is the unlimited partner). Under Art. 3 para. 1 sub. para. 2, EU Reg. 848/2015, German law could even be applicable on a UK company whose main interests are located in Germany.
2018: ADD CPH DAR DEN DME DUB FRA HAH HAM IST JIB KEF LYR MEL OSL PEK PKC PVG RAK STN SVO SYD YVR
 
willd
Posts: 144
Joined: Thu Nov 13, 2008 8:38 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 7:13 pm

LGAviation wrote:
willd wrote:
Correct me if I am wrong but Air Berlin is actually a company registered in England and Wales. A quick search on the UK Companies House website shows this to be the case, as does the fact that the correct name for the airline is Air Berlin plc.

Given that, surely we should be discussing the insolvency laws of England and Wales rather than people, who I expect aren't insolvency and restructuring lawyers or accountants at major international law firms or one of the big four accountancy firms, commenting on the laws of gErmany.


Airberlin plc is indeed incorporated under the laws of the UK. Airberlin itself though is organised in the form of Airberlin PLC & Co. Luftverkehrs KG (a German limited liability partnership in which the English plc is the unlimited partner). Under Art. 3 para. 1 sub. para. 2, EU Reg. 848/2015, German law could even be applicable on a UK company whose main interests are located in Germany.


To nitpick Air Berlin plc is incorporated under the laws of England and Wales. There is no such concept of UK law. Our Scottish friends, for example, operate a very different legal system to that of England and Wales.

Anyway I will bow to your far superior knowledge of restructuring and insolvency law.
 
User avatar
atcsundevil
Moderator
Posts: 3878
Joined: Sat Mar 20, 2010 12:22 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 8:05 pm

Interflug74 wrote:
Why snowploughs? Like one will enter the plane and leave without clearance from ATC? Simply start between two slots, straight over the green ..;-)

Probably because ATC doesn't care if they owe money and wouldn't try to stop them from leaving. I'm a controller, and if an aircraft called me up for a clearance, I could care less who's owed money. It's just not my problem. It's the airport's responsibility to detain the aircraft to try to force payment. They can do this while working on paperwork to apply liens, attempt recovery/repossession, or whatever else local law allows, but they generally won't get any help from ATC.

As many people have said, German law doesn't have much impact here. There may be some EU intervention of some kind, and something like this has the potential to cause a little bit of a diplomatic row, but if Icelandic authorities are determined to affect payment, then they're within their right to do so within their laws. That's part of the deal when you choose to operate to another country.
 
icelandair75w
Posts: 124
Joined: Sun Feb 03, 2008 8:27 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 8:22 pm

The ATC in KEF are employed by Isavia as far as I know, and I'd assume regardless of the circumstances they would be aware that the aircraft is not to be cleared departure until dues are paid (when informed by the higher ups at Isavia).
 
User avatar
NYPECO
Posts: 585
Joined: Sun Feb 15, 2015 12:55 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 8:29 pm

What's the point of parking snowplows around the aircraft? It can't leave without a tow truck anyway.
 
maxudaskin
Posts: 34
Joined: Sun Mar 05, 2006 12:33 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 8:57 pm

NYPECO wrote:
What's the point of parking snowplows around the aircraft? It can't leave without a tow truck anyway.


Aircraft are able to move forward under their own power, and some are even certified for power backs.
 
vfw614
Posts: 3822
Joined: Mon Dec 10, 2001 12:34 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 8:59 pm

abrelosojos wrote:
= Huh? Again, German law is irrelevant. As stated below:

Saludos,
Alex


German law is absolutely relevant for airberlin. Isavia can park as many snowploughs in front of the aircraft as they want, airberlin, under German insolvency law, is simply not legally allowed to pay debt from the time period before the insolvency proceedings to Isavia (or any other creditor).

And I am pretty sure that this is not a German pecularity, but a universal principle of insolvency law as long as the rule of law stands. Because otherwise, it would give rise to such cowboy antics as shown by Isavia everytime a company is put under adminstration as most creditors would try to extort money from the company under administration at the detriment of other creditors.

Isavia was under no obligation to give airberlin credit in the past. They did and so took the risk at a time when the dire straits of airberlin were well-known. They took a gamble and lost.
Last edited by vfw614 on Fri Oct 20, 2017 9:01 pm, edited 2 times in total.
 
User avatar
Finn350
Posts: 1601
Joined: Tue Jul 09, 2013 4:57 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 9:00 pm

NYPECO wrote:
What's the point of parking snowplows around the aircraft? It can't leave without a tow truck anyway.


It might not have enough fuel to fly out of Iceland, but why would it need a tow truck?
 
User avatar
Finn350
Posts: 1601
Joined: Tue Jul 09, 2013 4:57 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 9:21 pm

Air Berlin apparently thinks that German law rules in Iceland.

“We have told Keflavik airport repeatedly that any outstanding demands of payment relating to the time before Aug. 15 must be registered on the insolvency table due to insolvency law,” Air Berlin said in a statement.

“We have called on Keflavik airport to cease its unlawful actions immediately,” it added.


Source: https://www.reuters.com/article/air-ber ... SL8N1MV3P2
 
davidjohnson6
Posts: 528
Joined: Mon Jun 20, 2016 10:10 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 10:08 pm

The lawyers may well be able to argue the case in favour of either Isavia or Air Berlin. However, blocking the plane in and saying 'pay up or the aircraft stays on the ground' has the remarkable effect of concentrating minds quickly at the offices of the lessor, Air Berlin and possibly also Lufthansa. As long as the case is not 100% in Air Berlin's favour, then Isavia will probably get a good chunk of their money and not have to worry about spending much time in court

When Sky Europe (a Slovak airline) went bust about 10 years ago, Aeroports de Paris (AdP) blocked the plane in at Orly. As far as I recall, AdP got their money pretty quickly. Both Slovakia and France were members of the EU at the time, so if AdP can get away with this tactic, then Isavia (in a non-EU state) can in practice likely get away with this approach as well

https://spectator.sme.sk/c/20033488/sky ... plane.html
 
mjoelnir
Posts: 9388
Joined: Sun Feb 03, 2013 11:06 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Fri Oct 20, 2017 10:43 pm

At least part of the money are taxes, money that is paid by the passenger and ISAVIA through Air Berlin are just collecting it. I think it would be a question if that money is touched by bankruptcy laws.
 
RJWNL
Posts: 42
Joined: Sun Oct 01, 2017 4:08 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 12:07 am

Good to see the Viking "pay due tribute or suffer the consequences" attitude is still alive in Iceland and that they hopefully did learn something from the financial crisis in stead of playing along with the dirty games again :-)
 
User avatar
TWA772LR
Posts: 7061
Joined: Thu Nov 17, 2011 6:12 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 12:20 am

I didn't even know AB flew to KEF.

Slightly OT, if a flight declares an emergency does the airline have to pay the landing fees I. hat situation?
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
F27500
Posts: 793
Joined: Sun May 07, 2017 12:52 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 12:30 am

I hate when that happens.
 
RJWNL
Posts: 42
Joined: Sun Oct 01, 2017 4:08 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 12:45 am

F27500 wrote:
I hate when that happens.


You mean when an airline runs an unsustainable business model and expects others to suffer the consequences?
 
planemanofnz
Posts: 4362
Joined: Fri Sep 30, 2005 4:46 pm

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 2:10 am

LGAviation wrote:
The beauty of sovereignty in this case might be hampered by the fact that the Lugano convention and other agreements provide for that court rulings from Germany are generally enforceable in Iceland.

There are ways around the Lugano Convention, including invoking its public policy exception.

Cheers,

C.
 
User avatar
Super80Fan
Posts: 1622
Joined: Thu Jul 06, 2017 4:14 am

Re: Air Berlin plane grounded at KEF for unpaid airport charges

Sat Oct 21, 2017 3:48 am

Easy way for United to get more narrow-bodies, wait for all of Icelandair's planes to fly to the US, impound them, and hand them over to United :D

Claim they didn't pay Boeing fully of the 757's blah blah blah.
RIP McDonnell Douglas
RIP US Airways

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos