edu2703
Topic Author
Posts: 111
Joined: Sun Oct 25, 2015 12:50 pm

Avianca Brasil sinking in debt

Thu Dec 06, 2018 2:25 pm

An article published in the Folha de São Paulo newspaper column shows the current situation of Avianca Brasil:

Indebted, Avianca Brasil could lose aircrafts in court

At least two companies that lease aircraft to Avianca Brasil have filed a lawsuit against the airline to request the resumption of the aircrafts for lack of payment.

In the most recent case, the Irish subsidiary of BOC Aviation won, in the first instance, a case against the airline to recover two Airbus A320-351N. Avianca appealed the sentence.

The order, dated November 26th, authorizes "the requisition of police reinforcement and burglary order, if necessary".

We found with people familiar with the lawsuit that the payment had not been made for at least two months. The amount of the case is R$3.5 million (US$0.9 million).

In June, the company had R$1.168 billion (US$300 million) in debt maturing within a year, according to the financial statements presented to Anac (Civil Aviation regulatory agency). [...]

People related to the aeronautical sector told that the airline is considering asking for a judicial reorganization in the next few days.

Avianca Brasil denied that it will ask for a JR. The company states that "negotiations are part of any company's routine for optimization of results and [...] that processes are evolving within expectations''


Source (paywall): https://www1.folha.uol.com.br/colunas/mercadoaberto/2018/12/endividada-avianca-brasil-pode-perder-avioes-na-justica.shtml?utm_campaign=uol&utm_content=geral&utm_source=twitter&utm_medium=social-media
 
pipeafcr
Posts: 335
Joined: Sat Jun 13, 2009 1:47 am

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 3:10 pm

I wonder how this could effect the merger between AV Holdings and AV Brasil, I had also heard of AV Brasil joining the United/AV JV so that could either be really good or really bad for the Brazilian airline
Felipe Carrillo
 
User avatar
ojjunior
Posts: 669
Joined: Thu Jul 13, 2006 12:31 am

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 3:34 pm

Sad news. I've seen this movie in Brazil with VP, TR, RG and many others.
TAM just survived due it's selling (or JV, whatever) with the former LanChile.
Now this.
Hope they find a way out of this. Brazilian market need AV to keep rates/services in a reasonable level due competition.
 
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aemoreira1981
Posts: 2180
Joined: Mon Jan 09, 2017 12:17 am

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 3:48 pm

ojjunior wrote:
Sad news. I've seen this movie in Brazil with VP, TR, RG and many others.
TAM just survived due it's selling (or JV, whatever) with the former LanChile.
Now this.
Hope they find a way out of this. Brazilian market need AV to keep rates/services in a reasonable level due competition.


In a country where the domestic market is largely LATAM, Azul, and Gol, Avianca Brasil is a distant fourth: LATAM has the large international market.
 
edu2703
Topic Author
Posts: 111
Joined: Sun Oct 25, 2015 12:50 pm

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 4:02 pm

Rumours that Avianca has grounded five aircrafts to avoid being seized

VEJA reports that the court ordered 13 aircrafts to return to the lessors (24% of O6 fleet). There is still room for appeal

Source: https://veja.abril.com.br/economia/just ... implencia/
 
raylee67
Posts: 568
Joined: Mon Oct 24, 2011 11:06 pm

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 4:17 pm

I thought AV Brasil is a major part of the strategy and growth plan of Avianca? Without Brazil, Avianca cannot rival LATAM. Would Avianca Holdings pump capital to save AV Brasil?
319/20/21 332/33 342/43/45 35K 388 707 717 732/36/3G/38/39 74R/42/43/44/4E/48 757 762/63 772/7L/73/7W 788 D10 M80 135/40/45 175/90 DH1/4 CRJ/R7 L10
AY LH OU SR BA FI
AA DL UA NW AC CP WS FL NK
CI NH SQ KA CX JL BR OZ TG KE CA CZ NZ JQ RS
 
pipeafcr
Posts: 335
Joined: Sat Jun 13, 2009 1:47 am

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 4:30 pm

raylee67 wrote:
I thought AV Brasil is a major part of the strategy and growth plan of Avianca? Without Brazil, Avianca cannot rival LATAM. Would Avianca Holdings pump capital to save AV Brasil?


Officially no since AV Brasil in reality has little direct connection with mainline Avianca. There are talks for a merger which would officialize your statement however they have stalled since mainline AV has been mostly focusing on stablishing JVs with United and Lufthansa, with a merger with AV Brasil deep in their priorities list
Felipe Carrillo
 
winGl3t
Posts: 308
Joined: Sun Dec 11, 2011 3:52 pm

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 4:33 pm

pipeafcr wrote:
I wonder how this could effect the merger between AV Holdings and AV Brasil, I had also heard of AV Brasil joining the United/AV JV so that could either be really good or really bad for the Brazilian airline


I think medium term sustentabilty of O6 (Avianca Brasil) is what have been keeping AV away all these years.
 
Etheereal
Posts: 150
Joined: Tue Nov 29, 2016 11:44 am

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 5:26 pm

So O6 was busy getting the A350 for nothing, since they're pretty much getting their other planes taken back .. heh
 
User avatar
MatheusLPV
Posts: 18
Joined: Mon Aug 22, 2011 5:27 pm

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 7:54 pm

I've seen the same movie back in 2007 when Avianca Brazil used to be called as OceanAir ... They brought some 767 and 757 that allowed O6 to expand its network and launch their first Internacional destination : MEX ....

http://www.airliners.net/photo/OceanAir/Boeing-767-322-ER/2513024?qsp=eJwtjEEKwkAMRe%2BStRspuOiuXqAuvEBIPjq0doZMQIfSuxsHd4/34O0keXN8/N4KaKQKNnnSiQobvyqNOy1o72waTLOAtylZ9JrNry2csmMSQXHo38%2BmsF9Clb56xPocALt1puESXlMtK/cHnNNKx/EFuyIvnQ%3D%3D

http://www.airliners.net/photo/OceanAir/Boeing-757-2K2/1676335?qsp=eJwtjUEKwjAURO/y165azKI7PYAKeoFvMmogacPPD7SU3t00ups3PGZWstOomPWxJNBAGSz2QwdKLBwzDStFHsuLrRaB3CGew6XEJ6TanTH9scp5Ej0vtXCsOFmLpHD//iquuQ7Ztt33/tPtEXL7UW8qOp9T4LYCZR9o277DjTRE

A coupled of months after they realized the struggle , returned the aircrafts for the lessor , cabin crew were laid off and several flights were cut and the company sticked with a small fleet of MK28 ( Fokker 100 )....
If the company is currently struggling that way there is nothing but a hazy scenario ahead ....
 
C010T3
Posts: 1888
Joined: Wed Jul 19, 2006 5:48 am

Re: Avianca Brasil sinking in debt

Thu Dec 06, 2018 8:53 pm

The merger never happened, because the Efromovich brothers wanted to use it to dilute the other AV shareholders. The issue is that O6 never reached the point in which that became attractive for them to pursue.
 
asuflyer
Posts: 326
Joined: Mon Jan 01, 2007 12:48 pm

Re: Avianca Brasil sinking in debt

Fri Dec 07, 2018 1:10 am

The following aircraft have been stored, in an attempt that a deal can be reached and that they don't get repossessed.

PR-AVJ 318
PR-OBB 320
PR-OBQ A20
PR-OBR A20
PR-OCP 320
PR-ONR 318
PR-ONZ 320
 
dcajet
Posts: 3118
Joined: Sun Aug 01, 2004 9:31 am

Re: Avianca Brasil sinking in debt

Fri Dec 07, 2018 2:02 am

asuflyer wrote:
The following aircraft have been stored, in an attempt that a deal can be reached and that they don't get repossessed.

PR-AVJ 318
PR-OBB 320
PR-OBQ A20
PR-OBR A20
PR-OCP 320
PR-ONR 318
PR-ONZ 320


The 318s have been out of service and stored for a good while now, IIRC, @ BSB. PR-ONZ is at Sao Jose dos Campos awaiting delivery to Avianca Argentina. It has not flown for a while.
"Unattended children will be given espresso and a free kitten"
 
winGl3t
Posts: 308
Joined: Sun Dec 11, 2011 3:52 pm

Re: Avianca Brasil sinking in debt

Fri Dec 07, 2018 12:15 pm

dcajet wrote:
The 318s have been out of service and stored for a good while now, IIRC, @ BSB. PR-ONZ is at Sao Jose dos Campos awaiting delivery to Avianca Argentina. It has not flown for a while.


They have some A318 flying mostly SDU-BSB, SDU-CGH BSB-IOS and BSB-JDO routes.
 
Thibault973
Posts: 78
Joined: Fri Jul 17, 2015 9:11 am

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 2:31 pm

aemoreira1981 wrote:
ojjunior wrote:
Sad news. I've seen this movie in Brazil with VP, TR, RG and many others.
TAM just survived due it's selling (or JV, whatever) with the former LanChile.
Now this.
Hope they find a way out of this. Brazilian market need AV to keep rates/services in a reasonable level due competition.


In a country where the domestic market is largely LATAM, Azul, and Gol, Avianca Brasil is a distant fourth: LATAM has the large international market.


They might be a "distant fourth" due to their absence in some major markets (they only recently launched flight to Belem) but where they do operate they offer a vastly superior product with competitive prices. Domestic fares in Brasil are ridiculousely high. G3 and AD are nowhere near the LCLF that they pretend to be.
 
Thibault973
Posts: 78
Joined: Fri Jul 17, 2015 9:11 am

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 2:41 pm

Brazilian sites are reporting that United Continental Holdings agreed to lend 456 millions USD to the Synergy Group, who owns 100% of Avianca Brasil and 60% of the Avianca Holding.

https://www.aeroflap.com.br/united-forn ... ca-brasil/
 
winGl3t
Posts: 308
Joined: Sun Dec 11, 2011 3:52 pm

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 2:42 pm

Thibault973 wrote:
Domestic fares in Brasil are ridiculousely high.


They aren't. G3 average fare for 2017 was lower than 80 USD.
 
Thibault973
Posts: 78
Joined: Fri Jul 17, 2015 9:11 am

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 2:47 pm

winGl3t wrote:
Thibault973 wrote:
Domestic fares in Brasil are ridiculousely high.


They aren't. G3 average fare for 2017 was lower than 80 USD.


Which is not really telling since most of the traffic is concentrated on the 227 mi Sao Paulo to Rio route. Now try to fly to the Northeast or the North. Only in Canada and China I've I seen such high fares for under 2-3 hours flights.
 
User avatar
ojjunior
Posts: 669
Joined: Thu Jul 13, 2006 12:31 am

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 3:16 pm

winGl3t wrote:
Thibault973 wrote:
Domestic fares in Brasil are ridiculousely high.


They aren't. G3 average fare for 2017 was lower than 80 USD.


Can you please give us a single flight example with this rate please?
C'mon, don't use the lowest rate, for the most unwanted flying times, for the most common route.
Check G3 prices in high periods and then we discuss, they charge CGH-CWB up to BRL 1.700 sometimes, which means around USD 450 for a 50mins/180nm flight.
 
dcajet
Posts: 3118
Joined: Sun Aug 01, 2004 9:31 am

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 4:14 pm

Thibault973 wrote:
Brazilian sites are reporting that United Continental Holdings agreed to lend 456 millions USD to the Synergy Group, who owns 100% of Avianca Brasil and 60% of the Avianca Holding.

https://www.aeroflap.com.br/united-forn ... ca-brasil/


That loan is not related directly to Avianca Brazil. It is part of the proposed JBA agreement with Avianca Holdings, COPA and United Continental Holdings. The money is for Synergy to cancel some substantial debt that matures within a year. Mr Efromovich had to put down his participation (not sure if partial or total) as collateral for the loan. So if he defaults on it, United Continental Holdings will become a shareholder at Avianca Holdings NOT Av Brazil.
"Unattended children will be given espresso and a free kitten"
 
edu2703
Topic Author
Posts: 111
Joined: Sun Oct 25, 2015 12:50 pm

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 6:23 pm

That's it: Avianca Brasil has just filed a request for a judicial reorganization

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