Scandinavian budget carrier Norwegian has confirmed that four subsidiaries which employ more than 4,000 pilots and cabin crew members in Denmark and Sweden have filed for bankruptcy. Norwegian's crew members in Scandinavia are employed by various subsidiaries of the company. Norway-based employees' salaries are covered by the country's government while they are furloughed, but the same is not true for crewmembers based in Denmark and Sweden, says the airline. As a result, it had "no choice but to apply for bankruptcy" for three subsidiaries in Denmark and one in Sweden. The move will affect 1,571 of Norwegian's pilots and 3,134 of its cabin crew. Some 700 pilots and 1,300 cabin crew based in Norway, France and Italy are unaffected, notes the airline. "We have done everything we can to avoid making this last-resort decision and we have asked for access to government support in both Sweden and Denmark," states Norwegian's chief executive Jacob Schram. He adds: "It is heartbreaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I'm truly sorry for the consequences this will have for our colleagues. We are working around the clock to get through this crisis and to return as a stronger Norwegian, with the goal of bringing as many colleagues back in the air as possible." Norwegian says the bankruptcy process for the four subsidiaries is being managed by the courts in their respective countries. The airline has also cancelled crew-provision agreements with subsidiaries employing crew based in the UK, Spain, Finland and the USA, prompting analysts to wonder whether it is retrenching to Norway. Credit Suisse writes that the airline's moves are "suggesting to us it may close its Gatwick/Spanish bases". Bernstein analyst Daniel Roeska described Norwegian on 14 April as being "at the end of the line" after it proposed converting debt to equity in order to qualify for state aid. He wrote that Oslo had an interest in keeping the airline alive to facilitate connectivity for its corporate sector, but asked whether the airline would "admit that the long-haul, low-cost experiment has failed and retreat back to its Nordic core".

Source: Cirium

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