The district court in Berlin Charlottenburg rejected a challenge to Niki (HG, Vienna) insolvency proceedings filed by FairPlane and forwarded the case to a higher instance on January 4, Reuters reported.

The German passenger claims company filed a motion to relocate the Austrian airline's proceeding from the Berlin court to Korneuburg regional court in Austria, which would invalidate all decisions taken earlier, including the takeover by IAG International Airlines Group. FairPlane believes that Niki passengers' rights would be better protected by an Austrian court.

The jurisdiction of the Berlin Charlottenburg court had been previously established based on the location of most of the airline's creditors. The German court led proceedings related to all airberlin group units. For its part, Niki filed for bankruptcy in Berlin on December 13.

If the higher instance court agrees with FairPlane's challenge, it would effectively nullify the appointment of Lucas Flöther as the Niki bankruptcy administrator and all decisions taken by him, Handelsblatt reported.

The final verdict is expected "soon" although no exact date of the hearing has yet been revealed.

Despite operating on an Austrian air operator's certificate (AOC), Niki had operated mostly out Germany airports, including Dusseldorf, Berlin Tegel, and Hamburg Helmut Schmidt before it suspended all operations on December 14. It was a fully-owned subsidiary of Air Berlin, which declared bankruptcy in August 2017 and suspended all own operations at the end of October and wet-lease operations on behalf of Eurowings (EW, Dusseldorf) by December 31, 2017.

Just before the end of 2017, IAG's offer to buy the airline for EUR20 million (USD24 million) and a further EUR16.5 million in liquidity was accepted by the bankruptcy administrators. Niki is set to become a new Austrian-based unit of Vueling Airlines, IAG's LCC unit. The carrier is not expected to relaunch operations before March 2018.