Avianca Brazil bankruptcy filing jet repossession debacle
Avianca Brazil filed for bankruptcy protection December 10th, 2018. Faced with the prospect of repossession of a large chunk of its fleet by its multiple big-name aircraft lessors, the airline has sought for backup from the country’s judicial system.
A stock market disclosure by Aircastle confirmed it had moved to repossess 11 planes from the carrier after securing the aircrafts’ release by a court case in São Paulo earlier in the month. Meanwhile, BOC Aviation also won a preliminary injunction in a Brazilian court ordering the release of two of its planes, on December 11th states.
If granted, the bankruptcy filing would allow Avianca Brazil judicial and extrajudicial recovery procedures: meaning, it would be protected from creditor claims while a recovery plan is implemented. But there is a catch – in order to get legal recovery, the company must present a plan to creditors on how it would pay off its debts.
Avianca Brazil owes its lessors some $100 million. Court records reportedly show the airline also has debts to suppliers, including airports, fuel and maintenance companies that amount to $125 million.
The São Paulo-based carrier’s fleet consists of 50 all-Airbus aircraft (comprising A318s, A319s, A320s and A330s).