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There is no doubt that the shrinking of Avianca Brazil has altered market dynamics in Brazil’s domestic market, and the country’s three largest airlines believe Avianca Brazil’s bankruptcy will create opportunities for the country’s remaining carriers. GOL, LATAM Airlines Brazil and Azul have all been vying for Avianca Brazil’s assets but the government suspended an asset auction, including airport slots, and now the fate of Avianca Brazil is anyone’s guess. While the government drags its feet on rescheduling an auction or some other form of asset dispersal, Avianca Brazil continues to languish with Brazilian operators suspending the airline's operations. As the uncertainty over the fate of Avianca Brazil shows no signs of disappearing in the near future, Brazil’s airlines maintain a reasonably positive view of the domestic market, despite headwinds created by rising fuel prices and currency devaluation. Avianca Brazil's market share falls as its fleet shrinks Brazil’s domestic travel increased by 4.3% year-on-year in 1Q2019 on 3.4% capacity growth. GOL remain the domestic market share leader, with a 36% share. LATAM Airlines Brazil’s share slipped 2.8ppt year-on-year to 30.8%, and Avianca Brazil’s share plummeted 12.2% to 11.0% as its ASKs dropped 7.5%. Brazil domestic traffic share by airline for 1Q2019 Airline Domestic share GOL 36% LATAM Airlines Brazil 30.8% Azul 21% Avianca Brazil 11.9% Source: Brazil ANAC. Avianca Brazil sought creditor protection in Dec-2018, and since that time the airline has had some aircraft repossessed and has returned others to lessors. CAPA’s fleet database shows the airline has six aircraft in its operating fleet as of late May-2019 – down from an operating fleet of close to 50 aircraft. Avianca Brazil fleet summary as of mid-May-2019 Source: CAPA Fleet Database. The capacity reduction is in some ways strengthening an already rational domestic market in Brazil. Recently, executives from Azul remarked that at one point Avianca Brazil had approximately a 13% to 15% market share in Brazil, and “we believe that in all scenarios only about half that capacity will ever put back into the market, which I think is very healthy overall for Brazil”, said chief revenue officer Abhi Shah. LATAM Airlines ups 2019 Brazil domestic capacity as Avianca Brazil shrinks Citing a healthy demand environment and the “declines recently made by one of our competitors”, LATAM Airlines Brazil’s management have said that the airline is boosting its domestic capacity growth in Brazil in 2019 5% to 7%, from original projections of an increase of 2% to 4%. LATAM Airlines Group is shrinking its planned international growth to flat to a 2% increase, a reduction from previous estimates of a 3% to 5% expansion. The company’s overall capacity growth for 2019 is now projected at 3% to 5%, versus previous estimates of an increase of 4% to 6%. LATAM has agreed to forge leasing deals on 10 Airbus A320s that the lessor Aircastle reposed from Avianca Brazil and has not made a final decision about where those aircraft will be deployed. The company believes that opportunities exist in Brazil, as well as Chile, Peru and Colombia. Avianca Brazil's reorganisation has been mired in unpredictability Avianca Brazil’s bankruptcy protection has been complex and somewhat temperamental. Earlier in 2019 Azul forged a non-binding agreement to acquire significant assets of Avianca Brazil, paying USD105 million for 30 Airbus 320 jets and 70 airport slots that included slots at São Paulo Congonhas. Azul does not currently serve Congonhas, which is key market for business travellers taking the air shuttle to Rio de Janeiro Santos Dumont airport. See related report: Brazil aviation: positive outlook and Azul is still opportunistic Subsequently, Avianca Brazil’s largest creditor, the hedge fund Elliot Management, struck a deal with each of LATAM and GOL to offer USD70 million for Avianca Brazil’s assets at an auction originally scheduled for early May-2019. The company was divided up in seven segments to be auctioned off. After a legal challenge from Swissport Brazil, a court temporarily suspended the auction. Swissport claimed that the transfer of slots was prohibited. At the same time, Azul has submitted a new bid for of USD145 million for slots pairs, including the slot pairs for shuttle service from Congonhas to Rio. Prior to submitting its latest bid for Avianca Brazil’s slots, Azul’s management declared that “Congonhas would have been an incredible cherry on top of the cake for us to show our product to the market”. There has been no indication of a rescheduling of the auction, but Reuters is reporting that Elliot has opposed Azul’s latest bid, which further muddies the fate of Avianca Brazil. LATAM executives have stated that if there is no action for Avianca Brazil’s airport slots then the process would fall under current rules, which means they would be returned to a pool and distributed to the “current players”. As a result, Azul would lose out on an opportunity at Congonhas. Brazil's domestic market remains on solid ground, driven by sustained demand As the industry waits for the outcome of Avianca Brazil’s bankruptcy, the overall domestic market in Brazil remains solid despite rising fuel expense and currency pressure. LATAM has calculated that the BRL/USD average exchange rate for 1Q2019 was BRL3.77 per USD. Its Brazilian unit revenues denominated in the BRL grew 7.2% year-on-year in 1Q, but dropped by 7.2% measured in the USD. The company has seen fares increase and is forecasting double digit BRL unit revenue growth for its domestic operations in Brazil during 2Q2019. GOL’s year-on-year 2Q2019 unit revenue comps will be slightly inflated due to a trucker’s strike in Brazil during mid-May-2018 that pressured demand. But the airline is experiencing strong bookings and yields in Brazil’s domestic market. Azul has also commented it had experienced solid bookings in Apr-2019 and May-2019, noting a favourable balance between volumes and fares. Brazil's airlines should continue to maintain rational capacity growth Brazil’s domestic airlines have maintained a positive view of the domestic market over the past few months as the country slowly emerges from a recession. For now, it seems that those airlines are achieving a certain level of fare traction in the market as Avianca Brazil has now ceased operations. There is little doubt that at some point Avianca Brazil’s assets will be absorbed by the remaining airlines, and it appears those operators are aiming to maintain some degree of rational capacity growth in Brazil. https://centreforaviation.com/analysis/reports/brazilian-aviation-avianca-brazils-decline-assets-for-grabs-474772
Desde a última semana, empresa vem sendo alvo de ações pedindo a retomada de aeronaves arrendadas por falta de pagamento Renée Pereira e Cynthia Decloedt, O Estado de S.Paulo 11 Dezembro 2018 | 15h40 A Avianca Brasil entrou nesta segunda-feira, 10, às 15h23 com pedido de recuperação judicial, na 1ª Vara Empresarial de São Paulo, apurou o Estado. O pedido, de R$ 50 milhões, está em segredo de Justiça. A empresa ainda não respondeu ao pedido de entrevista. Desde a semana passada, a empresa vem sendo alvo de ações pedindo a retomada de aeronaves arrendadas por falta de pagamento. Após se expandir rapidamente, a Avianca no Brasil enfrenta dificuldades para pagar fornecedores, cumprir obrigações com concessionárias de aeroportos e pode ter de devolver aviões. O Estado apurou que a dívida com todos os aeroportos brasileiros, públicos e privados, chega a quase R$ 100 milhões – só com o de Guarulhos são R$ 25 milhões. Nos últimos dias, no entanto, a companhia conseguiu pagar parte das dívidas. Com pagamentos atrasados junto a fornecedores e obrigações com concessionárias de aeroportos, a companhia aérea está sob risco de ter de devolver 11 aviões, equivalentes a 18% de sua frota, à Constitution Aircraft. A companhia captou recentemente R$ 130,7 milhões com os bancos ABC, Daycoval, Safra e Fibra, com vencimentos entre 2018 e 2021, elevando para R$ 306 milhões o endividamento da companhia ao final do terceiro trimestre. No fim de 2017, estava em 194 milhões. https://economia.estadao.com.br/noticias/negocios,avianca-entra-com-pedido-de-recuperacao-judicial,70002641959