Avianca Brasil files for bankruptcy protection
As a result of requests for the return of at least 11 airplanes to leasing companies, Brazilian airline company takes time to restructure its debts
Avianca Brasil, an airline belonging to the Synergy Group (which also owns Avianca Colombia and has no direct relationship with the Brazilian homonym), announced that it filed a bankruptcy protection with the Brazilian courts. The reason alleged by the company is the risk of having to return at least 11 of its 55 aircraft to leasing companies who complain of late payment. Without these planes, Avianca would have to cancel dozens of flights in the high season period.
With the bankruptcy, the airline obtains a term to negotiate its debts without that implies in the possibility of liquidation. The move comes a day after the leasing company Aircastle has declared to the US Securities and Exchange Commission that it has terminated the leases of 10 Airbus A320-200 and 1 A330-200 aircraft. The alleged reason is the lack of airline payments.
In addition to Aircastle’s other two A320 aircraft belonging to BOC Aviation are also being requested by the lessee who has appealed to the Brazilian courts to prevent aircraft being used.
Asked by Airway in Brazil, the company explained that “due to the resistance of lessors of its aircraft to an amicable agreement, filed a request for judicial recovery to protect its customers and passengers.As the first court decision, such as the release of its fleet to meet all scheduled flights, at the airports where it operates, and the company reinforces that its operations will not be affected, passengers can have absolute peace of mind in making their reservations and purchasing their tickets, since all sales will be honored and maintained flights. Avianca Brasil will continue to serve all customers, flying to all destinations with the quality and excellence for which it is known.
The difficulties with leased aircraft occur precisely at a time when Avianca Brasil expanded its services and flew to more destinations abroad. With the A330-200 widebodies, of which there are five in the fleet, the airline can launch flights to New York, Santiago and Miami. The company is also often recognized for the good on-board service and other amenities that have made it recognized as the best in the industry in Brazil.
However, Avianca’s justification for problems with aircraft leasing was the same as its rivals, the high fuel prices. Despite this, the airline, the 4th largest in Brazil, was the one that grew the most in number of passengers transported in 2017. While the industry as a whole grew 2% Avianca advanced 18% – were almost 1.5 million passengers more than in 2016 only on national routes. The company’s share went from 8.6% to 10%, almost half of Azul, third in the ranking.
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