Troubled low-cost African carrier Fastjet Plc said yesterday that it had enough cash to operate until Dec. 21 and that it had met the conditions for an open offer and equity refinancing to raise funds, Reuters reported. The company in September announced a fundraising and equity refinancing aimed at increasing its equity base by at least $40 million, which will give the airline enough working capital until the end of 2019. The airline said it had cash balance of $7 million as of Wednesday, of which $6.5 million was restricted cash held inside Zimbabwe.
United Airlines CEO Oscar Munoz said yesterday that he was “not concerned” the bankruptcy filing of Avianca Brasil would hurt the No. 3 U.S. carrier’s joint venture with related airline Colombia’s Avianca Holdings, Reuters reported. Avianca Brasil, which filed for bankruptcy protection on Monday after being sued for repossession of its jets, is owned by holding company Synergy Group, which also controls the better-known Avianca Holdings. As part of a planned joint venture to give it a deeper foothold in Latin America, United extended a $456 million loan to Synergy last month, backed by Avianca common stock that can be executed in the event of a default. Munoz said the loan was “very exacting” in terms of how it had been structured and that Avianca Colombia had no connection to its Brazilian counterpart other than a common shareholder.
State-appointed administrators at Alitalia said on Wednesday they had received two binding offers for the Italian airline and one non-binding expression of interest, Reuters reported. They gave no details of the bids, saying only that they would examine the proposals carefully in the coming days. Italy’s state-controlled railways Ferrovie dello Stato (FS) said on Tuesday they would put in an offer for the airline. A source with knowledge of the matter said Delta Air Lines had submitted the second binding offer for Alitalia. The U.S. airline could not be reached for an immediate comment. Earlier on Wednesday, budget airline EasyJet (EZJ.L) said that it had submitted a revised expression of interest for a restructured Alitalia.
Nordic budget airline Primera Air has become the latest European carrier to go bust, telling staff that all flights were being halted and leaving thousands of passengers stranded, Reuters reported. Primera Air, which is Icelandic-owned but based in Copenhagen, began in 2003 and has served 97 destinations in more than 20 countries. The airline announced last month that it planned to launch routes from Madrid to New York, Boston and Toronto next year at an introductory price of 149 euros ($172) each way. It also announced in September plans for direct long-haul flights from Frankfurt to New York, Boston, Toronto and Montreal from next year. The collapse comes exactly a year after Britain’s Monarch Airlines went under after falling victim to intense competition for flights and a weaker pound. Air Berlin, Germany’s second-largest airline, filed for bankruptcy protection in August 2017. Primera was forced to cancel flights earlier this year, citing delays in receiving aircraft from Airbus, but has faced growing complaints about poor service and late refunds.
Friday at 5 p.m. is the deadline for parties to place a bid in writing for the assets of Alaska airline PenAir, which filed for chapter 11 bankruptcy protection a little over a year ago, the Anchorage Daily News reported. An auction is set for Oct. 3 at the Dena'ina Civic and Convention Center, said Jerry McHale, the trustee in the bankruptcy case. The Anchorage-based company is one of the largest regional airlines in the state. It serves a number of rural communities with flights to and from Anchorage. Alaska Airlines and Wexford Capital, an East Coast company that manages hedge funds, are two approved bidders so far, McHale said. Wexford has loaned PenAir money during the bankruptcy. There will be a hearing Oct. 5 to approve a sale based on the successful bid. During the course of the bankruptcy, there were problems with payments due for employees' insurance plans, McHale said. The health plan appeared to be underfunded by about $642,000, according to a court filing from earlier in September.
Mesa Air Group Inc., a regional carrier for American and United, raised $116 million in a downsized U.S. initial public offering seven years after exiting bankruptcy, Bloomberg News reported. Mesa Air sold 9.63 million shares for $12 each after marketing them for $14 to $16, according to data compiled by Bloomberg. The listing gives the carrier, which had planned to sell 10.7 million shares, a market value of more than $400 million. It’s Mesa’s second run as a publicly traded company. It first went public in 1987 but after filing for reorganization in 2010, it emerged from bankruptcy the following year as a private company. Its return to the public market came faster than that of Frontier Group Holdings Inc., the once publicly traded discount carrier that went bankrupt in 2008 and filed for an IPO in March 2017.
Aerospace manufacturer the Nordam Group Inc. has filed for chapter 11 bankruptcy protection after a high-stakes contract dispute over a key part for business jets with Pratt & Whitney Canada Corp., WSJ Pro reported. Nordam spent $200 million to develop the nacelle system — a housing system that works with the engine as an onboard power plant — for Gulfstream G500 and G600 jets, court papers say. The system is approved by regulators and is performing well in test flights, said Chief Executive Meredith Madden in a statement yesterday. However, the cost of the nacelle program has put a strain on Nordam’s finances, and the company turned to bankruptcy for breathing room to reorganize, court papers say. “If at all reasonably possible,” Nordam hopes to negotiate a consensual resolution with lenders and Pratt & Whitney, according to John C. DiDonato, a restructuring professional leading the turnaround effort. The company wasn’t able to do it outside of bankruptcy, he said in a declaration filed with the U.S. Bankruptcy Court in Wilmington, Del. Pratt & Whitney spokeswoman Jenny Dervin said the company worked “diligently for many months with our supplier Nordam and its lenders” offering “financial and other support that, in our view, could have kept Nordam out of bankruptcy.” Nordam rebuffed what she called “business continuity options,” and chose bankruptcy, according to Pratt & Whitney. Existing lenders led by JPMorgan Chase & Co. are offering up to $45 million in bankruptcy financing, money that could support the business while restructuring talks continue.
A bankruptcy judge has held the chief executive officer of defunct regional airline FlyGLO LLC in contempt, finding that the executive, a son of a prominent Louisiana-based trial lawyer involved in the BP oil spill litigation, hampered an aircraft company’s efforts to reclaim planes that it had leased to the airline, the American Lawyer reported. The ruling by U.S. Bankruptcy Judge Jerry Brown in New Orleans, issued April 12, held FlyGLO CEO Calvin “Trey” Fayard III personally in contempt and ordered him to pay sanctions just shy of $106,000. The judge found that Fayard had made it difficult for Alandia Ab, an aircraft leasing company based in Finland that was FlyGLO’s largest unsecured creditor in a chapter 7 bankruptcy, to recover three Saab 340 airplanes that FlyGLO rented for its regional airline. “Fayard engaged in a course of conduct that made it difficult for Alandia to obtain the paperwork and information it needed so that it could collect its planes and begin doing what needed to be done so that Alandia could find another lessor for its planes,” Judge Brown wrote in his contempt ruling.
Hawaiian Airlines' parent company agreed to purchase Island Air's operating certificate and other assets in a move that could save the failed company from liquidation, the Associated Press reported. The trustee overseeing Island Air's bankruptcy case filed a last-minute motion disclosing Hawaiian Holdings Inc.'s purchase. If the sale is approved, then the trustee's attorney Simon Klevansky said he would convert the case to a chapter 11 reorganization bankruptcy. Hawaiian Holdings Inc. said it would buy the operating certificate for $450,000 and immediately provide cash advances to pay for chapter 7 administrative expenses. Hawaiian Holdings said it would buy other assets, such as ground-service equipment, furniture and frequent-flier lists, for $300,000.
Island Air employees have been told by a bankruptcy judge that there is no guarantee they will receive their final paychecks, the Associated Press reported. Bankruptcy Judge Robert Faris on Wednesday approved a motion to convert the bankruptcy case to a chapter 7 liquidation from a chapter 11 reorganization. Island Air ceased operations on Friday. The employees have not been paid for the work they did this month. CEO David Uchiyama said earlier this week that pay period encompasses about 10 days.
