Aircraft leasing company GECAS will repossess eight aircraft leased to financially troubled Avianca Brazil, following a considerable deficit of payments. Just months after filing for Bankruptcy Protection, lessors have been allowed to pursue aircraft repossession by Brazilian’s civil aviation authority ANAC, following a court ruling in São Paulo.
What are the details?
According to Flightglobal, GECAS will repossess the aircraft beginning April 22nd, after the Easter weekend to minimize travel disruptions for passengers. With the GECAS repossession imminent, Avianca Brazil’s fleet is expected to be cut by over half through multiple repossessions.
Aircastle was the first lessor to claim back ten Airbus A320-200s after legal procedures with ANAC to de-register aircraft. Aircastle CEO Mike Inglese commented on the repossession, saying,
“We are pleased to have reached an important milestone in the transition of these aircraft to a new global operator. In line with the expectations that these highly in-demand modern aircraft will be quickly placed, we now anticipate that these aircraft will return to service on their new leases during the current quarter”.
Additionally, ANAC authorized the repossession for a further 18 aircraft on Tuesday, to take place after the busy Easter holidays. On Monday, six A320s will be returned to AGC, eight to GECAS and four to Vermillion. By next week the airline will have 28 aircraft repossessed, leaving the carrier with a fleet of 17, a sharp fall from the 50 it used to operate late last year.
The airline has already cancelled more than 300 flights since Tuesday, mainly due to aircraft shortages. Operational restrictions set by Guarulhos airport in Sao Paulo and Recife until the airline complies with pending airport handling charges have also had an impact on flight schedules. The cancellations during the busy Easter weekend is likely to cause widespread disruption.
What will GECAS do with the A320s they repossess?
The eight A320neos are scheduled to be transferred to Azul, which unveiled a nonbinding agreement with Avianca Brazil last month to take over 30 A320 aircraft in addition to 70 slots. However, earlier this month an alternative proposal led by Avianca Brazil lead creditor Elliott Management, proposed carving up the airline’s assets. Minimum bids are guaranteed by Gol and LATAM Brazil Airlines to exceed the amount offered by Azul.
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