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AVH - Avianca Holdings SA News Story

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Last Trade - 08/05/20

Sector
Industrials
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £2.51bn
Position in Universe th / 6846

Avianca Brasil lessor set to seize 20 pct of airline's fleet -source

Fri 11th January, 2019 3:19pm
By Marcelo Rochabrun
    SAO PAULO, Jan 11 (Reuters) - Lessor Aircastle  AYR.N  is
set to repossess 10 jets from Avianca Brasil, the country's No.
4 airline, after a bankruptcy hearing on Monday, a source
familiar with the matter said, potentially disrupting flights
for thousands of passengers. 
    The 10 Airbus A320 planes represent more than 20 percent of
Avianca Brasil's current fleet, according to data provided by
Brazil's aviation regulator, raising doubts about the carrier's
ability to fly its full flight schedule if the aircraft are
seized. 
    And it could lose more planes in the future. Lessor GE
Capital Aviation Services  GE.N  and an affiliate are seeking to
repossess 12 Airbus A320s from Avianca Brasil, according to
James Luton, a GE spokesman. 
    When the airline filed for bankruptcy protections last
month, the airline discussed the possible loss of 14 planes,
which it said would affect 77,000 passengers over a three-week
period. 
    A representative for Avianca Brasil declined to comment. The
bankruptcy filing came after years of mounting losses and late
aircraft payments. 
    Bankruptcy filings, while providing protection from
creditors, do not cover leases, the source of the carrier's
entire 46-aircraft fleet. 
    Between the end of 2016 and September 2018, Avianca Brasil's
liabilities to aircraft lessors quintupled to 415 million reais
($112 million), according to the carrier's financial statements.
    Still, a Brazilian bankruptcy judge stayed a decision that
would have allowed Aircastle to repossess the planes last month.
That stay, however, expires on Monday. 
    Since the stay was issued, the source said, Avianca Brasil
has not made any proposal to Aircastle that would have allowed
the carrier to keep the planes. Avianca Brasil owes Aircastle
more than $30 million, the source added. 
    The stakes are also high for Aircastle, as Avianca Brasil is
its largest single customer, representing some 7 percent of its
net book value, according to the lessor's financial disclosures.
 
    Avianca Brasil is separate from the better-known Avianca
Holdings SA  AVT_p.CN , which is based in Colombia. But they
share the same owner, a family company owned in part by
Bolivian-born airline entrepreneur German Efromovich. 
    United Continental Holdings  UAL.O  gave the family company
a $500 million loan last November. 
    Neither party has revealed why the loan was needed, but
Efromovich has been sued for failure to repay his debts in the
United States and Brazil in recent years. 
($1 = 3.7138 reais)

 (Reporting by Marcelo Rochabrun)
 ((marcelo.rochabrun@thomsonreuters.com; +55 11 5644 7768;))
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