News

The up and down of Brazilian Aviation market

1. Avianca suspended merger plan with Avianca Brazil

Avianca airlines suspended the merger with sister airline Avianca Brazil. Avianca told that due to diligence process to study a merger of the two airlines has been suspended for a sometime and will remain postponed till new date.

Avianca’s majority shareholder Synergy Aerospace is the owner of Avianca Brazil, but the two airlines are managed separately. Avianca Brazil shares the Colombian airline’s name through a licensing agreement signed in 2008. The similar names have often resulted in confusion and in recent months, a negative impact on Avianca’s stock price after its privately-owned Brazilian namesake filed for bankruptcy protection in December 2018 as it was faced with aircraft repossession threats from lessors.

Synergy had announced plans in early 2017 to integrate Avianca with Avianca Brazil – a plan that was opposed by Avianca’s second largest shareholder Kingsland Holdings which said the move will be detrimental to Avianca due to Avianca Brazil’s shaky finances.

In the third quarter of 2018, Avianca Brazil reported a net loss of R188 million according to financial results filed with Brazil’s civil aviation authority. The airline reported a net loss of R464 million in the first nine months of 2018.

In 2017, the airline reported a net profit of R41.6 million. It posted a net loss of R71.4 million in 2016.

2. Brazil judge suspend embrare boeing negotiation:

A Brazilian judge suspended negotiations for the tie-up of Brazilian aircraft maker Embraer SA and Boeing Co, according to a court document. The court issued an injunction suspending an Embraer shareholders meeting scheduled for Feb. 26 that would vote on whether to approve the terms already agreed upon by the two companies.

The decision will likely be appealed to a higher court. Several previous injunctions blocking the progress of the negotiation have been overruled.

Embraer said in a statement that it will take all available measures to maintain the shareholders meeting. Boeing did not immediately respond to requests for comment.

Federal judge Victorio Giuzio Neto wrote in his decision on a union lawsuit against Embraer that until all alleged illegalities in the negotiating process were evaluated, the shareholders meeting must be suspended.

In the deal, Embraer will sell 80 percent of its commercial plane division for $4.2 billion to Boeing, which will have total control of the new venture.

In the lawsuit, unions representing Embraer workers said the company’s management did not respect local legislation for listed companies, particularly in respect to what decisions should have been taken to shareholders instead of being made by the company’s management alone.

The Brazilian government, which holds a golden share in Embraer, has already approved the deal.

3. Brazilian navy order three airbus H135 light helicopter

The three helicopters will be operated by the 1st General Purpose Helicopter Squadron and will be used for missions such as special operations, transport of troops and freight, naval inspection, search and rescue and medical evacuation, says Airbus Helicopters. The aircraft are replacements for the Brazilian navy’s twin-engine, light utility Eurocopter AS355 ecureil helicopter.

Two of the helicopters will be equipped with medical kits, while other equipment will include a cargo hook, an emergency flotation system, a winch, as well as weather radar. The rotorcraft could also be used to carry out missions with the Brazilian Antarctic Programme in the near future, says Airbus.

According to Airbus Helicopters, more than 1,280 examples of the H135 are in operation around the world. The company is also pitching the H135 to the US Navy as a trainer helicopter, as part of the TH-XX competition to replace the service’s fleet of aging Bell TH-57 Sea Rangers.

Source: flightglobal  ,  reuters