Judicial administrator Alvarez & Masal has recommended to a court that Oceanair Linhas Aéreas S.A., which used to operate as Avianca Brasil (O6, São Paulo Congonhas), should be declared bankrupt, the Brazilian news agency Folhapress reported on November 14.

Responsible for monitoring the company's judicial recovery process, the administrator said that Oceanair was not viable and could not envisage conditions for the fulfilment of its debt repayment plan.

The move follows the Brazilian carrier's protracted period of inactivity given the withdrawal of its Air Operator Certificate (AOC) in May this year.

“The directions taken by the company seem to make it impossible to maintain the judicial recovery in the face of a complete emptying of business activity,” the global professional services firm declared in a petition filed with the First Bankruptcy Court of Sao Paulo.

Alvarez & Masal added that the company no longer owned any aircraft, nor did it have any employees on its premises.

“If a company is no longer viable, the planned remedy for such a situation is bankruptcy,” it said.

In December 2018, unable to pay debts estimated at the time to be BRL494 million real (USD118 million), Avianca Brasil was forced to apply for a judicial recovery process, a type of arrangement with creditors in an attempt to avoid bankruptcy. Subsequently, the amount has been corrected to around BRL2.7 billion (USD644 million).

In May, following the withdrawal of the AOC, Judge Ricardo Negrão of the Second Chamber of Business Law proposed the bankruptcy of Avianca Brasil as he considered it economically unviable. But most of the other judges in the chamber rejected the measure, maintaining that the process of judicial recovery should be kept as long as the approved payment plan was met. It was not, however, leading to the recommendations of the judicial administrator.