At least 20 jets are at the center of a struggle by lessors to obtain possession after the ailing Brazilian airline fell behind with lease payments. Last Friday (Jan.18) Brazil’s aviation regulator ANAC confirmed it would no longer ground ten jets, while another lessor ramped up its efforts to take possession of a further ten aircraft.
Both Aircastle Ltd and General Electric Capital Aviation Services (GECAS) have struggled to take back possession of these aircraft after Avianca filed for bankruptcy protection back in December 2018. Last Thursday ANAC confirmed it would ground ten aircraft at the request of GECAS, but a day later advised it was no longer prepared to intervene in the dispute.
Separate to GECAS’ dispute, a representative for U.S.-listed Aircastle confirmed last Friday the firm would be filing an appeal of a legal order that stayed repossession of Avianca Brasil’s planes for 15 days until Feb. 1. Aircastle has 10 planes on lease to Avianca Brasil which is its biggest customer. According to Reuters, Avianca Brasil said in a statement that it “continues operating normally,” but did not directly address a question on how an appeal from Aircastle could affect its operations.
According to the legal order which the lessors signed, the 15-day stay on repossessions was requested by a bankruptcy judge in Sao Paulo after the airline and its lessors failed to reach an agreement at a hearing last Monday. However, Aircastle said in a statement that the leasing firms did not agree with the judge’s decision, commenting that “His decision is completely contrary to the Cape Town Convention.” This was in reference to a little-known international treaty that allows for swift repossession of aircraft which both Brazil and the United States have signed.
