The Island Air operating certificate sale cleared its first hurdle by receiving an OK by the US Bankruptcy Court.
A little while ago, I reported that a subsidiary of Hawaiian Holdings, Hawaiian Air’s parent company, called Elliot Street Holdings expressed interest in purchasing Island Air’s operating certificate. The purchase, however, needed to be reviewed by the US Bankruptcy Court first. And that review happened last Friday, with US Bankruptcy Judge Robert Faris giving the sale the green light.
The First of Many Steps
Getting the Bankruptcy Court approval is just the first in many steps needed for the sale. In fact, just because Hawaiian got the ok doesn’t mean the sale is guaranteed. Before the sale can even take place, Island Air’s current Chapter 7 bankruptcy filing will need to be reconverted back to a Chapter 11. Then, Hawaiian will need to purchase the shares of a shell company created with a single asset; the operating certificate. However, during the share sale, others make outbid Hawaiian and ultimately acquire the shell company and its certificate.
The process of reconverting Island Air’s filing back to a Chapter 11 alone could prevent the sale altogether. This is primarily due to the fact that there are a large number of parties that need to give consent to confirm this plan. And if that consent isn’t obtained, then the conversion and sale won’t take place.
Island Air Operating Certificate Sale Cleared, Final Thoughts
There’s a long road ahead till we know whether or not this sale will clear. However, it’ll be interesting to see what happens. We know what Hawaiian’s plan is for the certificate, but anything is possible. I, for one, would love to see if another purchaser will materialize. A third party sweeping in, after all, could mean the appearance of another airline in Hawaii.