21st Apr 2020 18:44
(Alliance News) - Avation PLC on Tuesday said it is currently leasing 11 aircraft to Virgin Australia.
Avation also noted the troubled airline continues to operate flights.
Virgin Australia on Monday moved toward voluntary administration, making the carrier the largest yet to fall victim to the coronavirus pandemic.
The cash-strapped airline had appealed for an AUD1.4 billion, around USD894 million, loan to continue operations, but the federal government refused to bail out the majority foreign-owned company.
Avation said: "The entry into voluntary administration is a procedural step to allow Virgin Australia to be sold or for a 'restructure and refinance of the business and bring it out of administration as soon as possible' said the administrator."
Avation also noted it is aware there are reports of "10 or more interested buyers" for Virgin Australia.
"Both state and federal governments in Australia have made statements about the necessity for a second locally based airline to service Australia with domestic and international routes," the aircraft leaser said.
Avation has 11 ATR 72 aircraft under operating lease to Virgin Australia. Of these 2 ATR 72 aircraft are subleased to, and operated by, another airline. Avation also provides two Fokker F100 jet aircraft under finance lease.
Administrators are now expected to be appointed to try to find a buyer for the company and manage creditors - which is expected to take two to three months.
Virgin had stood down 8,000 staff, suspended all international routes and scrapped all bar one domestic route after Australia shut its borders to limit the spread of Covid-19 and imposed tough restrictions on movement.
Shares in Avation closed 6.5% lower in London on Tuesday at 130.00 pence each.
By Paul McGowan; [email protected]
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