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

Avianca Brasil declares bankruptcy

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
Last edited by atcsundevil on Tue Dec 11, 2018 11:07 pm, edited 1 time in total.
Reason: Title updated
 
pipeafcr
Posts: 338
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
 
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ojjunior
Posts: 674
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: 2184
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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
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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
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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
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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
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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
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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
 
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MatheusLPV
Posts: 18
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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 ....

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

https://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: 1890
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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: 328
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: 3143
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: 309
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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: 82
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: 82
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: 309
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: 82
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.
 
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ojjunior
Posts: 674
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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: 3143
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
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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
 
Thibault973
Posts: 82
Joined: Fri Jul 17, 2015 9:11 am

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 7:39 pm

They have filed for bankruptcy. Very sad news. I was just reading yesterday an old article on Oceanair’s succes story:

https://www.reuters.com/article/us-braz ... SKBN1OA29J

Maybe the title of the thread should be changed accordingly ?

Does someone have knowledge on Brazilian bankruptcy law ? What does this mean for the airlines, are they shutting down or is this something à la chapter 11 ?
 
C010T3
Posts: 1890
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Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 7:50 pm

They have filed for the equivalent of a Chapter 11 protection.
 
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SDUMIA
Posts: 2
Joined: Tue Dec 11, 2018 10:01 pm

Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 10:11 pm

Looks like that Avianca Brasil (O6 - Oceanair) has filed for "recuperação judicial", equivalent of the US Chapter 11 Bankruptcy protection.
https://www.valor.com.br/empresas/60213 ... 938-mihoes
 
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SDUMIA
Posts: 2
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Re: Avianca Brasil declares bankruptcy

Tue Dec 11, 2018 11:42 pm

This is rather interesting considering all the ongoing negotiations that German Efromovich is doing between Avianca Internacional - United - COPA, essentially United would keep a controlling stake....but they kept Avianca Brasil (O6 - controlled by Jose Efromovich) out of the negotiations. .
Perhaps they are considering in selling O6? Azul would be a good candidate, considering that they already have agreements with United, COPA and TAP
 
incitatus
Posts: 3224
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Re: Avianca Brasil sinking in debt

Tue Dec 11, 2018 11:54 pm

Thibault973 wrote:

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.


I understand you are looking at Avianca as a passenger, one concerned with some product attributes and price. But step back and look at the situation of the company: If they are in dire financial straights, the price/service proposition they have had in the market is not sustainable. They were careless to expand at a fast pace with price points that were below what they needed to be viable.
I do not consume Murdoch products including the Wall Street Journal
 
dcajet
Posts: 3143
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Re: Avianca Brasil sinking in debt

Wed Dec 12, 2018 12:23 am

incitatus wrote:
Thibault973 wrote:

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.


I understand you are looking at Avianca as a passenger, one concerned with some product attributes and price. But step back and look at the situation of the company: If they are in dire financial straights, the price/service proposition they have had in the market is not sustainable. They were careless to expand at a fast pace with price points that were below what they needed to be viable.


I think you nailed it. Well said.
"Unattended children will be given espresso and a free kitten"
 
airliner777
Posts: 419
Joined: Thu May 25, 2000 6:38 am

Re: Avianca Brasil declares bankruptcy

Wed Dec 12, 2018 3:15 am

What could happen to their cargo division? There is only one freighter aircraft flying as O6 (PR-ONV).
 
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DL747400
Posts: 497
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Re: Avianca Brasil sinking in debt

Wed Dec 12, 2018 2:17 pm

Thibault973 wrote:
Domestic fares in Brasil are ridiculousely high. G3 and AD are nowhere near the LCLF that they pretend to be.


Balderdash! Airlines operating in Brasil are no different than airlines in any other part of the world in the sense that:

1. They must be operated efficiently. Is this the case?
2. They need to collect sufficient revenue to enable them to operate at a profit. Is this the case?

The $$$ is going somewhere. Just sayin'...
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
VTCIE
Posts: 111
Joined: Wed Oct 10, 2018 11:10 am

Re: Avianca Brasil declares bankruptcy

Wed Dec 12, 2018 4:23 pm

There goes another A318 operator. All there is left now are AF, BA (BA1/2), AV and TAROM.
5H-TCG
 
pipeafcr
Posts: 338
Joined: Sat Jun 13, 2009 1:47 am

Re: Avianca Brasil declares bankruptcy

Wed Dec 12, 2018 4:59 pm

Because of the name confusion, AVH stocks plummeted both in Wall Street and Bogota
Felipe Carrillo
 
jbs2886
Posts: 1844
Joined: Wed Apr 01, 2015 9:07 pm

Re: Avianca Brasil declares bankruptcy

Wed Dec 12, 2018 5:04 pm

VTCIE wrote:
There goes another A318 operator. All there is left now are AF, BA (BA1/2), AV and TAROM.


Except Avianca Brazil isn't gone...its just reorganizing. Could it lead to them shutting down? Yes. But right now, its operating.
 
Etheereal
Posts: 153
Joined: Tue Nov 29, 2016 11:44 am

Re: Avianca Brasil declares bankruptcy

Wed Dec 12, 2018 5:52 pm

pipeafcr wrote:
Because of the name confusion, AVH stocks plummeted both in Wall Street and Bogota

Im sure thats no confusion at all.
 
pipeafcr
Posts: 338
Joined: Sat Jun 13, 2009 1:47 am

Re: Avianca Brasil declares bankruptcy

Wed Dec 12, 2018 10:02 pm

Etheereal wrote:
pipeafcr wrote:
Because of the name confusion, AVH stocks plummeted both in Wall Street and Bogota

Im sure thats no confusion at all.


Irony or are you also confused?
Felipe Carrillo
 
dcajet
Posts: 3143
Joined: Sun Aug 01, 2004 9:31 am

Re: Avianca Brasil declares bankruptcy

Wed Dec 12, 2018 10:19 pm

pipeafcr wrote:
Because of the name confusion, AVH stocks plummeted both in Wall Street and Bogota


Plummeted may be a bit of a strong word. At the end of the trading day, AVH only lost 7,600 shares, at a $3.6 price, which is around US$25,000...

Image
"Unattended children will be given espresso and a free kitten"
 
juliuswong
Posts: 1110
Joined: Wed Dec 14, 2016 3:22 am

Re: Avianca Brasil declares bankruptcy

Fri Dec 14, 2018 2:33 am

Avianca Brasil started returning their A320neo.

Airbus A320-251N MSN 7918 2-ROBQ BOC Aviation Ferried 28 Nov 18 GRU-BSB, PR-reg on return to lessor, seen regd 12dec18 (+ 8086 2-ROBR 01dec18 GRU-BSB ex PR-OBR) ex PR-OBQ
Source: https://www.skyliner-aviation.de/regdb. ... av4&page=1

Currently their fleet stands at:
5 A318
4 A319
37 A320 (10 neo, rest ceo)
6 A332
- Life is a journey, travel it well -
 
xiaotung
Posts: 953
Joined: Fri Jan 06, 2006 7:58 pm

Re: Avianca Brasil declares bankruptcy

Fri Dec 14, 2018 2:59 am

I heard that Azul were considering the possibility of joining the AV-UA joint venture. Are they preparing for the worst?
 
danipawa
Posts: 48
Joined: Sat Oct 01, 2016 1:18 am

Re: Avianca Brasil declares bankruptcy

Sat Dec 15, 2018 12:57 pm

Airbus A330-243 1492 PR-OCJ Avianca Brasil ferried 15dec18 GRU-PBM-SBD on return to lessor ex N941AV

Airbus A320-214 6651 PH-IAI Aviation Capital Group Avianca Brasil cs, ferried 14dec18 CGH-NAT ex PR-OCP

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