A New York district bankruptcy court will consider whether to approve LATAM Airlines' request to purchase four Airbus narrowbodies and related engines from lessors. LATAM outlined the aircraft it intends to purchase in a 2 September filing. The court plans to consider that request, among other aspects of its reorganisation plan, during a hearing scheduled for 23 September. The aircraft include Airbus A319s and related IAE engines from four lessors: Ype Leasing Limited, Jatobá Leasing Limited, Pau Brasil Leasing Limited and Mogno Leasing Limited. The court also recently approved LATAM and Figueira Leasing Limited to extend a leasing agreement until 31 October. LATAM filed for Chapter 11 bankruptcy protection in the USA on 26 May.

Source: Cirium

A bilateral safety agreement between European and Chinese aviation regulators came into effect on 1 September, paving the way for simpler evaluation and certification processes for airframers of the two regions. The European Union Aviation Safety Agency says it held a joint meeting with its Chinese counterparts on 3 September, where both parties adopted technical implementation procedures, which are meant to support the safety agreement. “These administrative and technical procedures describe in detail how EASA and [Civil Aviation Administration of China] will conduct the validation and reciprocal acceptance of civil aeronautical product approvals,” the agency adds. In May last year, both the EU and China signed the agreement, which aims to “support worldwide trade in aircraft and related products” by removing “unnecessary duplication” of evaluation and certification activities by respective authorities.
The deal will also promote co-operation between the EU and China towards a “high level” of civil aviation safety and environmental compatibility. The CAAC hailed the “new stage of co-operation” between China and Europe. The signing has created a “clear path for cooperation between authorities and industrial enterprises” of both regions, allowing for the “mutual recognition of civil aviation productions” from both China and the EU. Chinese airframer, Comac has been pushing for EASA certification for its C919 narrowbody program in recent years, with Chinese premier Li Keqiang visiting his German counterpart in 2017 to call on Germany to help with the securing of type certification. ATR, meanwhile, has embarked on flight testing to obtain Chinese type certification on its ATR 42-600 turboprop.

Source: Cirium

South African carrier Comair’s business rescue plan envisages a consortium of investors taking a 99% shareholding in the company, and restarting services around 1 December. Some 1,800 jobs will be retained – although 400 will be shed – and the airline will resume operations with a fleet of 25 aircraft. The consortium comprises seven named individuals plus an investment vehicle, Luthier Capital, putting up an initial interest-free loan of R100 million ($6 million), to be drawn down in two equal tranches on 21 September and 1 October. If certain conditions are met, these funds will be converted to securities and a further R400 million in equity will be injected, giving a total equity recapitalisation of R500 million. New net debt totalling R600 million will be sought. Comair has 20 aircraft but the optimised fleet, according to the business plan, would comprise 15 owned and 10 leased aircraft. Lease terms on four aircraft have been renegotiated and the intention is to do the same for the rest. Projections from the business plan estimate that Comair will become profitable in the year to 30 June 2022, with a pre-tax surplus of R497 million for the airline operation and R647 million for the group as a whole. The investors intend to acquire Comair by increasing the authorised capital by 50 billion shares, to a total of 51 billion. If the conditions for the investment plan are not met, the rescue practitioners will commence a structured wind-down of the company. Comair has been immersed in a business rescue effort since early May, the result of rising debt levels from a fleet renewal, exacerbated by the grounding of the Boeing 737 Max as well as the air transport crisis triggered by the pandemic. Its total debt increased from R2.2 billion in June 2015 to R4.9 billion by the end of last year, with a 10-fold rise in interest and financing costs. Fleet ownership costs have risen by 65% over the three years to June 2020. Over the same period revenues have increased by only 26% compared with 41% for overall expenses, and operating profit has fallen sharply. Comair had secured a settlement last year for a R1.1 billion payment from South African Airways, over a competition legal case, but SAA’s own subsequent entry into business rescue means recovery of the full amount is highly unlikely.

Source: Cirium