Aircastle Limited (Aircastle), which acquires, leases and sells commercial jet aircraft to airlines throughout the world, is looking to challenge the latest court decision concerning its attempts to repossess aircraft on lease to Avianca Brazil, which has failed to meet the necessary payment schedule. The latest ruling by a Brazilian judge has given Avianca a ‘stay of execution’ by prohibiting Aircastle from taking back possession of the aircraft before mid-April, providing lease payments recommence on February 1, 2019. Aircastle is under the impression that the judge’s decision contravenes established Brazilian law and the Cape Town Convention, adopted by Brazil, which sets down international rules for the repossession of aircraft and is subsequently already appealing the decision.
Mike Inglese, Aircastle’s CEO, stated, “A predictable judicial system and reliable framework for the recovery of aircraft is a principal factor in the cost and availability of capital to airlines. Brazil is the third largest civil aviation market in the world and the country’s aviation industry has benefitted from its adoption of Cape Town, enabling Brazil to attract significant foreign capital. While we were fully prepared for an unfavorable ruling, we remain hopeful that the Brazilian Judiciary will respect the rule of law and honor their obligation under The Cape Town Convention. We still expect to recover our aircraft on a timely basis.”
Mr. Inglese continued, “Our aircraft being operated by Avianca Brazil are modern, desirable aircraft and we expect the aircraft to be placed in a timely manner after repossession. In addition to leasing aircraft to Avianca Brazil, we provide financing to other major airlines in Brazil and have commitments to purchase almost US$1 billion in Embraer E2 next generation regional jet aircraft. We believe the judge’s decision will negatively impact Brazil’s civil airline industry with higher costs and less funding.”
