Alert: Debt Restructuring and Liability Management – Managing times of Distress for Airlines February 2019 In October 2018, we wrote an article on airline restructuring and insolvency, where we considered the key operational risks which have implications for airline survival. That article was written in light of the failure of Primera Air. Contributing Authors: Since that article was written, the wave of distress within the aviation industry has continued, and there have been further casualties. Cobalt Air, a Cypriot carrier, collapsed in October after the Chinese state-owned Aviation Industry Corp, Cobalt’s 49% shareholder, declined to provide additional funding. The Chinese investment in Cobalt was part of the "One Belt, One Road" project under which China aims to link itself to Europe via Central Asia. Air Zimbabwe, unprofitable for decades, filed for administration late last year. Additionally, several other private airlines, including Small Planet Airlines, Skywork, and, more recently, Germania and Flybmi, have also collapsed. A number of state-owned airlines around the world have also ratcheted up their dependency on their respective governments to stay afloat. Sri Lankan Airlines was reported to be cash strapped even after capital injections from the Sri Lankan Government, whilst South African Henry Kikoyo Airways continues to rely on support from the South African Government, which
[email protected] recently invested a further five billion rand. +44.207.851.6084 Failure in the airline business is not new, and has been a more common occurrence since the Carter administration kick-started the deregulation of the Henry Kikoyo is a Partner at Brown airline business in the late 1970s.