Avianca Brasil (O6, Rio de Janeiro Santos Dumont) has confirmed it filed for judicial recovery (Recuperação Judicial) in the 1st São Paulo Commercial Court on the afternoon of Tuesday, December 11.

If granted, the motion would grant Avianca Brasil judicial and extrajudicial recovery procedures that resemble the US Chapter 11 reorganization scheme wherein companies in distress are protected from creditor claims while a recovery plan is implemented.

In a statement to ch-aviation, the carrier said the filing had been made due to the resistance from lessors to reach an agreement regarding contractual terms and payment obligations.

Earlier in the week, Aircastle confirmed in a stock market disclosure that it had indeed moved to repossess ten A320-200s and one A330-200 from Avianca Brasil over persistent delinquent lease payments. The US-based lessor secured the aircraft's release via a court case in São Paulo earlier this month. BOC Aviation also won a preliminary injunction in a Brazilian court ordering the release of its two A320neo - PR-OBQ (msn 7918) and PR-OBR (msn 8086).

"Avianca Brasil reports that, due to the resistance of its aircraft lessors to reach an amicable agreement, the company filed a request for judicial recovery to protect its customers and passengers. As per the first court decision, the company’s claims were secured, such as the release of its fleet to meet all scheduled flights, at the airports where it operates," it said.

"The company reinforces that its operations will not be affected," Avianca Brasil added. "Passengers can have absolute peace of mind in making their reservations and purchasing their tickets, as all sales will be honoured and the flights kept.

"Avianca Brasil will continue to serve all customers, flying to all destinations with the quality and excellence for which it is known."

According to Estadão, OceanAir Linhas Aéreas S/A, as Avianca Brasil is legally known, requested in its application that "all actions and executions in progress against it be suspended" and that the Brazilian civil aviation authority (ANAC) allow it to maintain, at least provisionally, all existing concessions and authorizations. It also asked that all airports, both in Brazil and abroad, continue to allow it access to their facilities and services.

Synergy Aerospace, which also owns Avianca Holdings, acquired Oceanair (O6, Rio de Janeiro Santos Dumont) in 2004 before rebranding it as Avianca Brasil. As such, this filing does not affect Avianca (AV, Bogotá) and its affiliated carriers.

For their part, Avianca Holdings and its network of affiliated carriers have not been immune to South America's volatile economic landscape, currency devaluations, and surging fuel prices.

It is recalled that during an earnings call last month, Avianca Holdings Chief Executive Officer Hernan Rincon confirmed the holding was in talks with Airbus to defer deliveries of up to 50 narrow-body aircraft while at the same time reassessing the status of 50 more.

Editorial Comment: Updates the article with Avianca Brasil's comments - 11.12.2018 - 23:14 UTC