Hawaiin Air And Avianca Flie Chapter 11

[frank rizzo]

Hawaiian Air And Avianca Flie Chapter 11

BOTH HAWAIIAN AIR AND AVIANCA FILED FOR CHAPTER 11 BANKRUPTCY TODAY, MORE CARRIERS WILL PROBABLY FOLLOW OVER THE WEEKEND.

 

[Batman]

Hawaiian Chapter 11 Update

Reuters
UPDATE - Hawaiian Airlines files Chapter 11, blames lessors
Friday March 21, 4:31 pm ET


(Recasts, adds Aloha merger details, closing prices)
HONOLULU, March 21 (Reuters) - Hawaiian Airlines Inc. said on Friday it filed for Chapter 11 bankruptcy protection after failing to win lease concessions from aircraft lenders during a severe slump in air travel.

The 73-year-old Honolulu-based carrier, the 12th largest in the United States, listed more than $100 million in assets and more than $100 million in debts in its voluntary petition filed with the U.S. Bankruptcy Court for the District of Hawaii.

"Despite our best efforts and extensive negotiations...we have been unable to reach agreement with certain of our aircraft lessors on reducing our lease rates to market levels," Chief Executive John Adams said in a statement.

The carrier "had no choice" but to file Chapter 11, he said. Its parent, Hawaiian Holdings Inc. (AMEX:HA - News), did not file for protection from creditors.

Hawaiian, which has been trying to restructure for several months, said it hopes to exit bankruptcy in the fall. Last March the carrier aborted a planned $170 million merger with rival Aloha Airgroup that it had hoped would help it cope with the air travel slump that followed the Sept. 11 attacks.

Air travel has slumped further as war fears weighed on an already weak economy. UAL Corp.'s(NYSE:UAL - News) United Airlines Inc. and U.S. Airways Group Inc.(Other OTC:UAWGQ.PK - News) sought Chapter 11 protection last year, and analysts said others might follow.

Colombian airline Avianca and its U.S. unit filed for Chapter 11 on Friday.

Hawaiian said on March 14 it had been seeking $15 million in lease concessions from Boeing Co. (NYSE:BA - News), the world's largest commercial aircraft maker. The company plans to have 16 wide-body 767-300ERs in its fleet this year.

The airline did not specify whether the Boeing leases were a factor in its bankruptcy filing. Boeing was not immediately available for comment.

Talks with lessors will continue, Adams said. Hawaiian Airlines plans to honor all tickets and pay vendors normally, and said the bankruptcy filing should not affect code-sharing agreements.

Hawaiian shares closed Friday unchanged at $1.48.

In its Chapter 11 petition, Hawaiian Airlines listed Wells Fargo Bank (NYSE:WFC - News) as trustee as its largest unsecured creditor, with a $10.3 million claim.

(Additional reporting by Chris Stetkiewicz in Seattle.)

 

[Batman]

Who is next???

Reuters
UPDATE - Colombian airline Avianca files U.S. Chapter 11
Friday March 21, 12:30 pm ET
By Amira Abultaif

(Adds possible staff cuts, losses)
BOGOTA, Colombia, March 21 (Reuters) - Struggling Colombian airline Avianca and its U.S. subsidiary of the same name have filed for Chapter 11 bankruptcy protection in the United States to restructure up to $130 million in debt, a top official said on Friday.

The loss-making company will also cut some routes to cope with the effects of rising fuel prices, more expensive insurance premiums and falling demand, said Juan Emilio Posada, the head of Alianza Summa, which controls Avianca.

"The protection could last for months or years. We hope that in approximately eight months we will emerge again from the protection offered by Chapter 11," Posada told Reuters, adding that as much as $130 million could be restructured.

The airline, the latest casualty in a struggling global aviation industry buffeted by sluggish economies and war fears, could cut some of its 3,000 staff, out of Summa's total 7,500, he said.

The other airlines controlled by Summa, ACES and SAM, will not be seeking Chapter 11 protection, which allows companies to propose a restructuring plan to a U.S. court while continuing to operate.

The Colombian airline should have its restructuring plan ready within 40 days, well ahead of the 120-day legal limit, according to Posada.

Avianca, which joined up with SAM and local rival ACES last year to form Summa, dominates aviation in Colombia, but has also been hit by a depreciation of the peso, which has pushed up fuel costs. Deep political and economic crises in Venezuela and Argentina and Colombia's guerrilla war have hurt demand for air tickets.

Summa is owned 50-50 by Colombian conglomerate Valores Bavaria (VBS.CN) and by the National Coffee Growers' Federation.

Avianca lost about $35 million in 2002, down from about $94 million the year before, according to preliminary company figures due to be presented at a shareholders' assembly at the end of March.

The carrier's 10 main domestic routes saw traffic fall by 14 percent in the 12 months to this February and international traffic declined by 13 percent.

Summa has a total debt of about $300 million, including pension liabilities, of which some $270 million correspond to Avianca.

Valores Bavaria, which is itself controlled by businessman Julio Mario Santo Domingo, has pumped about $320 million of fresh capital into Avianca in the past two years, but has indicated it expects the company to begin to support itself now that it is part of Summa.