The fall of the dominoes

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  • cwoodward
    Participant

    Air Mauritius links

    https://www.fin24.com/Companies/Industrial/coronavirus-air-mauritius-goes-into-administration-20200422

    From Flight Global

    Air Mauritius files for voluntary administration
    By Graham Dunn22 April 2020
    Save article
    Struggling Air Mauritius has entered voluntary administration after the board resolved that with the coronavirus grounding it would not be able to meet its financial obligations in the foreseeable future.

    Air Mauritius had already embarked on a transformation programme in January this year under which it was reviewing its business model in a bid to secure sustainability.

    Air Mauritius Airbus A330-900

    Source: Airbus

    In a company statement the airline’s board of directors state that while “substantial progress” was made in developing its action plan, the closure of borders and halting of air services because of the coronavirus has led to a “complete erosion of the company’s revenue base”. Air Mauritius was forced to suspend flights at the start of April because of the coronavirus restrictions.

    “There is uncertainty as to when international air traffic will resume and all indications tend to show that normal activities will not pick up until late 2020,” the airline says.

    ”In these circumstances, it is expected that the company will not be able to meet its financial obligations in the foreseeable future. The board therefore took the decision to put the company under voluntary administration in order to safeguard the interests of the company and that of all its stakeholders.”

    Administrators from Grant Thornton have been appointed.

    Despite an improved performance for the three months ending December 2019 which helped reduces losses, Air Mauritius was still posted a net loss of €14.9 million ($16.2 million) at the nine-month stage in its most recent financial results. Even before the coronavirus impact, the airline had flagged challenges around “fierce competition” as well as currency and fuel price volatility. It was against this backdrop the carrier was developing its new economic model, which it had hoped to implement in April.

    Air Mauritius took delivery of its first Airbus A330-900 last year, of which it operates two of the type along with A350s, A340 and older A330 widebodies, as well as a pair of Airbus narrowbodies and three ATR turboprops, Cirium fleet data show.


    transtraxman
    Participant

    Information about Air Mauritius………..

    “Air Mauritius placed in voluntary administration”, (Travel Weekly 22-4-20)

    https://www.travelweekly.co.uk/articles/368621/air-mauritius-placed-in-voluntary-administration

    “Breaking: Air Mauritius Placed Into Administration”, (Simple Flying 22-4-20)

    Breaking: Air Mauritius Placed Into Administration

    ……..please correct me if I am wrong.
    I do not understand exactly the difference between “into administration” and “bankruptcy”. The former seems to be the same as the Chapter 11 process in the USA. This means a technically bankrupt company is placed into the hands of financial “experts(?)” with the aim of refloating it to try and save it, its business, its employees and ultimately its shareholders. On the other hand “Bankruptcy proceedings” means no more than liquidating a company´s assets to pay its debtors, employees, government taxes, other debts with the remaining to be distributed to the shareholders as last on the list.

    In such cases, in the USA and other similar financial regimes there is more chance of a company being saved and able to fight another day. In the latter cases, where the only possibility is bankruptcy proceedings, it always means the death of the company. That does not seem to be a level playing field.


    transtraxman
    Participant

    In March 2020, Zeitfracht announced a rebranding for WDL Aviation (Cologne/Bonn) which is to become German Regional Airlines operating within the German Airways branding alongside sister company Luftfahrtgesellschaft Walter which became the actual German Airways. It is the latter, in Dortmund, that is going into administration

    “Germany’s LGW files for voluntary administration,” (ch-aviation 22-4-20)

    https://www.ch-aviation.com/portal/news/89443-germanys-lgw-files-for-voluntary-administration


    capetonianm
    Participant

    I was sent this earlier.

      *** I have not checked and cannot vouch for the correctness of the facts or figures ***

    -Virgin fires more than 3000 people including 600 Pilots

    -Finnair returns 12 planes and lays off 2,400 people

    -You grounds 22 planes and fires 4,100 people

    – Ryanair grounds 113 planes and gets rid of 900 pilots for the moment, 450 more in the coming months

    – Norwegian completely stops its long-haul activity!!! The 787s are returned to the lessors

    – SAS returns 14 planes and fires 520 pilots… The Scandinavian states are studying a plan to liquidate Norwegian and SAS to rebuild a new company from their ashes

    – Ethiad cancels 18 orders for A350, grounds 10 A380 and 10 Boeing 787. Lays off 720 staff

    – Emirate grounds 38 A380s and cancels all orders for the Boeing 777x (150 aircraft, the largest order for this type). They “invite” all employees over 56 to retire

    – Wizzair returns 32 A320s and lays off 1,200 people, including 200 pilots, another wave of 430 layoffs planned in the coming months. Remaining employees will see their wages reduced by 30%

    – IAG (British Airways’ parent company) abandons the takeover of Air Europa (and will pay €40 million compensation for that).

    -IAG (Iberia) grounds 56 planes,

    -IAG (British Airways) grounds 34 planes. Everyone over 58 to retire

    – Luxair reduces its fleet by 50% (and associated redundancies)

    – CSA abolishes its long-haul sector and keeps only 5 medium-haul aircraft

    – Eurowings goes into bankruptcy

    – Brussels Airline reduces its fleet by 50% (and associated redundancies)

    – Luftansa plans to ground 72 aircraft (in two installments)

    – Hop is studying the possibility of reducing fleet and staff by 50%

    Additional info:

    Currently 60 new aircraft stored at Airbus with no buyers in sight (order cancellations) including 18 A350s

    They forecast a minimum of 8,000 grounded planes by September. With an average of 5.8 crews per plane (medium and long haul combined), that would make more than 90,000 unemployed pilots worldwide.

    The air transport industry is on life support!


    AMcWhirter
    Participant

    [quote quote=996592]The air transport industry is on life support![/quote]

    And you’ll see another carrier whose future is uncertain once my posting is moderated.


    AMcWhirter
    Participant

    Is Cape Verde Airlines in trouble ?

    Last month Routesonline reported that this airline was suspending flights for 30 days.

    https://www.routesonline.com/news/38/airlineroute/290456/cabo-verde-airlines-suspends-scheduled-service-for-30-days-from-18mar20/

    And today CAPA (paywall) reports that IATA has suspended its ticketing arrangements.

    https://centreforaviation.com/news/iata-suspends-cabo-verde-airlines-ticketing-under-bsp-993190


    AMcWhirter
    Participant

    UK’s Stobart Group takes 49 per cent stake in Dublin-based Stobart Air. There had been a question mark over its future.

    https://www.independent.ie/business/uk-group-agrees-to-buy-49pc-stake-of-stobart-air-for-over-340000-39151870.html


    Tom Otley
    Keymaster

    Article about Virgin, and why Delta won’t be putting in any more money

    Virgin Atlantic Owes Delta $200 Million, Won’t Receive Cash From U.S. Shareholder

    3 users thanked author for this post.

    RoyJones
    Participant

    I can’t help wondering how much Virgin Atlantic and Virgin Australia were each paying Branson for the rights to use the Virgin name. There are other companies using the Virgin name who pay a licence fee for the privilege so I suspect the airlines were also paying. Does anyone know the answer to this ?

    1 user thanked author for this post.

    AMcWhirter
    Participant

    I cannot comment on VS but Sir RB owns only a small percentage of VA.

    According to this piece from Smh.com.au the licence fee for use of the Virgin brand is “suggested to be worth $15 to $25 million a year.” I am assuming these amounts are for AU$.

    https://www.smh.com.au/business/companies/the-week-that-virgin-australia-hit-the-ground-hard-20200423-p54mhp.html


    RoyJones
    Participant

    I guess I should clarify my comment.

    I am aware Virgin Group own about 10% of Virgin Australia and 51% of Virgin Atlantic and they would be entitled to dividends (if any) from those holdings. But in addition RB licences the Virgin name to all the Virgin companies and receives a royalty for that. If its AU$15 to AU$25 million a year for VA how much more would it be for the bigger VS?

    I also see above that VS owes DL some $200 million. As a UK taxpayer I would be livid to see the UK govt give VS a loan and then $200 million disappear into Delta’s coffers and another amount paid to Virgin Group for any reason whatsoever. My feeling is that the UK govt should allow VS to go under and then consider a “investment” in a reborn VS in return for about 90% of the shareholding. This would maintain competition at Heathrow. Like Lloyds Bank in the financial crash the govt could [in theory] be repaid over time by selling its shares.

    2 users thanked author for this post.

    AMcWhirter
    Participant

    n166
    Participant

    newbie here – this is a great thread, thank you to everyone who provides this great info!

    interested to hear thoughts on the impact of the fall of these airlines on the industry once travel starts again (whenever that is).

    reduced choices of airlines + surviving airlines clawing back what they can = significantly increase in ticket prices?


    Tom Otley
    Keymaster

    capetonianm
    Participant

    reduced choices of airlines + surviving airlines clawing back what they can = significantly increase in ticket prices?

    I see that as positive. Carriers have been in a race to the bottom for yeas, trying to match the cheap prices of the LCCs, who operate a different business model, and those with apparently deep pockets, for example the ME3.

    Standards have dropped with prices. It’s high time for that trend to be reversed.

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