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Last Trade - 08/05/20

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Industrials
Size
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Market Cap £n/a
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Revenue £2.51bn
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Brazil regulator moves to ground 20 pct of Avianca Brasil's fleet

Fri 18th January, 2019 12:36am
By Marcelo Rochabrun
    SAO PAULO, Jan 17 (Reuters) - Brazil's aviation regulator
said on Thursday it was going to ground 10 planes operated by
Avianca Brasil, 20 percent of its fleet, prompting the carrier
to go to court seeking to prevent the decision being enforced.
    The regulator, known as ANAC, said it was acting at the
request of one of various lessors involved in a festering legal
dispute with Avianca Brasil, which filed for bankruptcy last
month after falling behind with lease payments.
    In response, Avianca Brasil, the country's fourth largest
airline, filed an emergency motion asking a judge to issue an
injunction against the regulator. The motion is still pending.
    The decision came as a surprise because Avianca Brasil
reached an agreement in court on Monday with the aircrafts'
owner and other lessors which granted the carrier 15 more days
to operate the planes.  urn:newsml:reuters.com:*:nL1N1ZE193
    No planes had been grounded as of Thursday night and it
could take up to five business days to take them out of service,
the regulator said. Avianca Brasil has argued that grounding the
planes would affect thousands of people.
    Avianca Brasil said in a statement that the announcement by
ANAC was "in disagreement with the judicial decision" in a Sao
Paulo bankruptcy court.  
    The request to ground the planes was submitted by GECAS, a
General Electric subsidiary that leases aircraft, two days after
its Brazilian lawyers agreed to let the planes fly for 15 more
days, according to a letter obtained by Reuters.
    "Given recent events, GECAS has found it necessary to take
steps to protect our interests," company spokesman James Lutton
said in an email. "We have terminated leases on these aircraft
and are currently working with Brazilian authorities and the
airline to ensure a satisfactory return of the aircraft." 
    In the letter, the regulator said the agreement signed
between Avianca Brasil and GECAS only applied to actions filed
in a court. But since ANAC is not a judicial body, it was not
bound by that court decision.
    Avianca Brasil filed for bankruptcy in December, after
falling behind on lease payments on many of its planes, setting
off a legal battle in Brazil and the United States over whether
it could still operate the aircraft. The airline has so far said
it has managed to keep its operations running as normal.
    Avianca Brasil is separate from the better known Avianca
Holdings  AVT_p.CN  which is based in Colombia. Although they
share a corporate parent.

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