Virgin Australia has entered voluntary administration as it seeks to recapitalise the business. "The decision comes as the group has continued to seek financial assistance from a number of parties, including state and federal governments, to help it through the unprecedented crisis, however is yet to secure the required support," it said in a stock-exchange statement today. Australia’s second-largest carrier, with over 10,000 employees, has posted losses in the last seven financial years. It sought a A$1.4 billion ($890 million) bailout from the federal government to get it through the coronavirus crisis, which has seen it ground its fleet and halt operations. The Australian government has provided several relief packages for its aviation industry as a whole, most recently agreeing to underwrite a minimum domestic network operated by Virgin Australia and larger rival Qantas, but never directly addressed Virgin Australia's request for specific assistance. Administrators from Deloitte will now attempt to put the business on a better footing. The airline’s frequent flyer scheme, Velocity Frequent Flyer, is a separate company and is not in administration. In Australia, voluntary administration is a process whereby an insolvent company gets time to work out an arrangement with its creditors. Administrator Vaughan Strawbridge said in the same statement, "Our intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible." He added: “We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far.” Virgin Australia has suspended trading of its shares since 14 April while the company was in talks over its financial options and restructuring. At the end of the financial half-year ended 31 December 2019, it had adjusted net debt of A$5 billion. When the pandemic hit, it was already undertaking efforts to reduce its cost base, including simplifying the fleet, axing unprofitable routes and renegotiating supplier agreements. The airline's chief executive Paul Scurrah said in today's statement that the airline wants to come through the Covid-19 crisis and help the Australian economy get back on its feet. “Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the Covid-19 crisis. Australia needs a second airline and we are determined to keep flying,” he stated. Founder and shareholder Richard Branson, who has come under fire for not doing more to provide both Virgin Australia and sister airline Virgin Atlantic with funds, said it is not the end for Virgin Australia. “This is not the end for Virgin Australia and its unique culture. Never one to give up, I want to assure all of you – and our competitor – that we are determined to see Virgin Australia back up and running soon,” he wrote in a letter to employees.

Source: Cirium

United Airlines is selling six Boeing 787-9s and 16 737 Max jets in a leaseback deal with the US division of Singapore-based lessor BOC Aviation. BOC Aviation has disclosed the details of the transaction to the Hong Kong Stock Exchange. It states that the transaction covering the 22 aircraft is set to close this year. All the 737s involved are the Max 9 variant. BOC Aviation has not identified the specific 787 or 737 airframes to which the agreement pertains. “The company will enter into long-term leases with the airline in respect of the aircraft,” says the lessor. Fleets data lists United as having 14 in-service 737 Max jets, all grounded since last year, plus 28 787-9s of which 10 are in storage as a result of the coronavirus situation. BOC Aviation states that its leasing fleet, at the end of March, comprised 567 aircraft either owned, managed or on order.

Source: Cirium

Plans to convert Chile's regional airport Valdivia into an international point of entry will go ahead despite the coronavirus pandemic's impact on global traffic and air travel demand. As the health crisis halts air traffic around the world, Chile is pressing ahead with its plan to privatise the last six commercial airports still operated by the government, Chile's ministry of public works indicates. Valdivia, in the south of the nation, is the first of the six that will undergo the privitisation process, expected to begin in 2021. The remaining five airports are Balmaceda, Castro, Osorno, Pucón and Viña del Mar. While the $10 million investment in Valdivia's pre-privatisation terminal expansion and modernisation is relatively modest, it is part of a major state-funded airport system revamp. Through 2022, Chile will invest $1.4 billion in the modernization of all its major 17 commercial airports, including the 11 already privatised terminals, many of which are facing renewals of their respective concession contracts. Valdivia’s conversion into an international airport is the result of traffic growth at two low-cost airlines Sky Airline and Jetsmart, both of which have developed both national and international routes that bypass the Santiago hub. The passenger traffic at Chile’s network of airports has grown over the last decade at a yearly average of about 10%, reporting a total of 41 million passengers in 2019.

Source: Cirium