Vedder Price was recognized in Ishka: Aviation Finance’s 2023 Deal of the Year Award Winners list for its counsel and advisory work in two of the largest aviation finance deals of 2023. For more information on Vedder Price’s role in the Best MEA Deal of 2023 and the Best Commercial Bank Deal of 2023, visit our website below. #GlobalTransportationFinance #AviationFinance #DealOfTheYear
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💡 We are delighted to announce that our firm, López-Ibor DPM, has contributed to the The Aviation Finance & Leasing 2024 Guide by Chambers and Partners. This guide offers the latest legal insights on aircraft and engine purchase and sale, leasing, debt finance, security, liens, enforcement, and current legislative proposals. A special thanks to Chambers and Partners for including Alfonso López-Ibor and Olivia López-ibor, who have shared their expertise in this comprehensive resource. Read the full guide here: https://lnkd.in/dBek-4ki Read the Spain chapter here: https://lnkd.in/dWtWwaqQ #AviationLaw #FinanceAndLeasing #LegalInsights #ChambersGuides
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BD2P is delighted to be a contributing firm to the #Chambers Global Practice Guide: #AviationFinance & #Leasing 2024. BD2P’s aviation experts, senior partner Uros Popovic and partner Stefan Golubović, authored the chapter for #Serbia and provided the latest legal information on: 🔹 aircraft and engine purchase and sale, 🔹 aircraft and engine leasing, 🔹 aircraft debt finance, security, liens, enforcement, and current legislative proposals. Read our chapter for more expert commentary on the legal issues around aviation >>>
Chambers Aviation Finance & Leasing 2024 Guide - Bojović Drašković Popović & Partners
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𝐎𝐟 𝐡𝐞𝐚𝐝𝐰𝐢𝐧𝐝𝐬 𝐚𝐧𝐝 𝐭𝐚𝐢𝐥𝐰𝐢𝐧𝐝𝐬 𝐨𝐯𝐞𝐫 𝐈𝐧𝐝𝐢𝐚𝐧 𝐒𝐤𝐢𝐞𝐬..... Several Indian airlines have faced financial troubles and filed for bankruptcy in recent years, highlighting the challenging and competitive nature of the aviation industry in the country. Here are some key lessons that can be drawn from the failures of airlines like Go First, Jet Airways, Kingfisher Airlines, and others: 𝑶𝒗𝒆𝒓𝒆𝒙𝒑𝒂𝒏𝒔𝒊𝒐𝒏 𝒂𝒏𝒅 𝒖𝒏𝒔𝒖𝒔𝒕𝒂𝒊𝒏𝒂𝒃𝒍𝒆 𝒈𝒓𝒐𝒘𝒕𝒉: Airlines like Kingfisher and Jet Airways grew too rapidly without a solid financial foundation, leading to heavy losses. Mergers and acquisitions, such as Kingfisher's merger with Air Deccan and Jet Airways' takeover of Air Sahara, added to their financial woes. 𝑯𝒊𝒈𝒉 𝒐𝒑𝒆𝒓𝒂𝒕𝒊𝒏𝒈 𝒄𝒐𝒔𝒕𝒔: The aviation industry in India faces high operating costs, particularly due to taxes on Aviation Turbine Fuel (ATF), which can account for 50-70% of an airline's expenses. Fluctuations in the US dollar exchange rate also impact profits, as major expenditures like aircraft leasing are dollar-denominated. 𝑰𝒏𝒕𝒆𝒏𝒔𝒆 𝒄𝒐𝒎𝒑𝒆𝒕𝒊𝒕𝒊𝒐𝒏 𝒂𝒏𝒅 𝒑𝒓𝒊𝒄𝒆 𝒘𝒂𝒓𝒔: To attract passengers, airlines often resort to drastically cutting ticket prices, making it challenging to maintain profitability, especially when operational costs remain high. 𝑳𝒂𝒄𝒌 𝒐𝒇 𝒔𝒌𝒊𝒍𝒍𝒆𝒅 𝒘𝒐𝒓𝒌𝒇𝒐𝒓𝒄𝒆: The aviation sector in India faces a shortage of trained and skilled employees, leading to operational disruptions and unsustainable wage levels. 𝑰𝒏𝒂𝒅𝒆𝒒𝒖𝒂𝒕𝒆 𝒊𝒏𝒇𝒓𝒂𝒔𝒕𝒓𝒖𝒄𝒕𝒖𝒓𝒆: Gaps in airport infrastructure and air traffic control systems hinder the industry's growth and development. 𝑹𝒆𝒈𝒖𝒍𝒂𝒕𝒐𝒓𝒚 𝒄𝒉𝒂𝒍𝒍𝒆𝒏𝒈𝒆𝒔: High taxes on ATF, tough entry barriers for new entrants, and outdated regulations have acted as barriers to the rapid growth of the aviation sector. 𝑮𝒓𝒐𝒖𝒏𝒅𝒊𝒏𝒈 𝒐𝒇 𝒂𝒊𝒓𝒄𝒓𝒂𝒇𝒕: The grounding of aircraft due to technical issues or financial constraints, as seen in the case of Go First, can significantly impact an airline's operations and profitability. To ensure the long-term success of the aviation industry in India, airlines need to focus on sustainable growth, efficient cost management, and adapting to changing market conditions. Collaboration between airlines, regulators, and policymakers is crucial to address challenges such as high taxes on ATF, infrastructure gaps, and workforce shortages.
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Following airlines represent a mix of full-service and regional carriers that faced financial troubles and ultimately filed for bankruptcy in India, highlighting the challenging and competitive nature of the aviation industry in the country. 1. Go First (formerly GoAir): - Filed for bankruptcy in May 2023 due to issues with Pratt & Whitney engines, which led to the grounding of about half its fleet. - The airline's total debt to financial creditors was 65.21 billion rupees ($797 million) as of April 2023. 2. Jet Airways: - Once India's largest private airline, Jet Airways ceased operations in April 2019 after running out of cash and owing significant debts to creditors, amounting to about 180 billion rupees ($2.20 billion). - Despite being cleared to resume commercial flights, the airline's comeback as Jet 2.0 has been delayed due to differences between its current owners and lenders. 3. Kingfisher Airlines: - Owned by businessman Vijay Mallya, Kingfisher Airlines ceased operations in 2012 after facing heavy losses following a merger with a low-cost carrier, Air Deccan. - The airline owed lenders, including the State Bank of India, a substantial amount of 9,000 crore rupees. 4. Air Costa: - In November 2019, the bankruptcy court initiated a corporate insolvency resolution process for Air Costa, a grounded regional low-cost airline. - The Directorate General of Civil Aviation (DGCA) had suspended Air Costa's flying license in June 2017, resulting in the airline permanently ceasing operations. 5. ModiLuft: - ModiLuft, launched in 1993 by industrialist SK Modi in partnership with Lufthansa, faced financial challenges and alleged funding issues with Lufthansa in 1996. - The airline was later sold to UK-based Bhupendra Kansagra, who renamed it Royal Airways, but it remained defunct for a period despite retaining its license. 6. Air Sahara: - Air Sahara, owned by businessman Subrata Roy of Sahara Parivar, was a rapidly-growing airline with cheaper tickets and wide connectivity in domestic and international routes. - Founded in 1991, Air Sahara was taken over by Jet Airways in 2006 for $545 million. 7. Paramount Airways: - Paramount Airways, based out of Chennai, started as an airline catering to business travelers in 2005, focusing on South and East India routes. - The airline was the first in India to launch the New Generation Embraer 170/190 Family series aircraft but closed its operations in 2010 due to mounting debts. To add a few more to the list Vayudoot, MDLR Airlines, Air Pegasus, Air Deccan, Air Mantra, Indus Air. Do you see any patterns or reasons recurring across these cases? GO FIRST, IndiGo (InterGlobe Aviation Ltd), Air India Limited, Vistara - TATA SIA Airlines Ltd., Air India Express, Akasa Air #airlines, #travel, #aviation, #pilot, #cabincrew, #holidays, #passengers, #insolvency, #bankruptcy
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"Navigating Turbulence: Is IBC the Right Flight Plan for Aviation Insolvencies?" The aviation industry is in the midst of a storm, and the turbulence isn’t easing. With Go First heading towards liquidation and Jet Airways officially grounded after an endless legal battle, the sector is confronting some of its toughest challenges yet. Since the non-operational airline’s acquisition bid-winner Jalan Kalrock Consortium had failed to infuse INR 350 Crore as an initial tranche and meet other obligations under a resolution plan, it has left no room for a successful recovery. Now, creditors are left facing a tough reality: an estimated INR 1,000 crore recovery—only about 13% of the dues owed. Valuable assets such as a fleet of Boeing 777 aircraft and prime real estate in Mumbai are expected to fetch just 50% of their book value in auction. As we look at these developments, one big question arises: Is the Insolvency and Bankruptcy Code (IBC) really the right tool to handle aviation sector insolvencies, or are we simply applying a one-size-fits-all solution to an industry that requires a more nuanced approach? The aviation sector is unlike any other—it’s capital-intensive, heavily regulated, and at the mercy of market fluctuations. A standard insolvency resolution process may not be the best plan for this industry’s unique set of challenges. It’s time for a solution that recognizes the complexities of aviation and lays the groundwork for a recovery that’s both sustainable and effective. Insolvency & Bankruptcy Board of India (IBBI) #JetAirways #IBC #CorporateRestructuring #AviationIndustry #AviationChallenges #DebtRestructuring #AirlineRestructuring
'No choice': Supreme Court orders liquidation of grounded Jet Airways
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✈ Is IBC the right option to deal with aviation sector insolvencies? With Go First already heading towards liquidation, Jet Airways after half a decade long legal battle also lands into liquidation. The Supreme Court’s recent decision to liquidate Jet Airways’ assets marks a significant turn in the airline’s prolonged insolvency saga. Since the non-operational airline’s acquisition bid-winner Jalan Kalrock Consortium had failed to infuse INR 350 Cr as an initial tranche and meet other obligations under a resolution plan, the Apex Court ordered liquidation of Jet Airways. The liquidation process is expected to yield ~INR 1,000 Cr for creditors. This amount represents ~ 13% of the dues pending to financial creditors and 6.4% of the total admitted claims against the airline. The book value of Jet Airways’ assets, including a Boeing 777-35 aircrafts and prime real estate in Mumbai, totals around INR 1,066 Cr and auctioning these assets is likely to fetch ~ 50% of their total value. This development underscores the complexities and financial implications of corporate insolvency in India. The aviation sector, in particular, faces unique challenges that require robust and effective resolution mechanisms. #JetAirways #Insolvency #Liquidation #SupremeCourt #Aviation #Finance
Mint Quick Edit | Jet Airways’ failed take-off: An IBC let-down
livemint.com
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✈ Is IBC the right option to deal with aviation sector insolvencies? With Go First already heading towards liquidation, Jet Airways after half a decade long legal battle also lands into liquidation. The Supreme Court’s recent decision to liquidate Jet Airways’ assets marks a significant turn in the airline’s prolonged insolvency saga. Since the non-operational airline’s acquisition bid-winner Jalan Kalrock Consortium had failed to infuse INR 350 Cr as an initial tranche and meet other obligations under a resolution plan, the Apex Court ordered liquidation of Jet Airways. The liquidation process is expected to yield ~INR 1,000 Cr for creditors. This amount represents ~ 13% of the dues pending to financial creditors and 6.4% of the total admitted claims against the airline. The book value of Jet Airways’ assets, including a Boeing 777-35 aircrafts and prime real estate in Mumbai, totals around INR 1,066 Cr and auctioning these assets is likely to fetch ~ 50% of their total value. This development underscores the complexities and financial implications of corporate insolvency in India. The aviation sector, in particular, faces unique challenges that require robust and effective resolution mechanisms. #JetAirways #Insolvency #Liquidation #SupremeCourt #Aviation #Finance
Mint Quick Edit | Jet Airways’ failed take-off: An IBC let-down
livemint.com
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Following airlines represent a mix of full-service and regional carriers that faced financial troubles and ultimately filed for bankruptcy in India, highlighting the challenging and competitive nature of the aviation industry in the country. 1. Go First (formerly GoAir): - Filed for bankruptcy in May 2023 due to issues with Pratt & Whitney engines, which led to the grounding of about half its fleet. - The airline's total debt to financial creditors was 65.21 billion rupees ($797 million) as of April 2023. 2. Jet Airways: - Once India's largest private airline, Jet Airways ceased operations in April 2019 after running out of cash and owing significant debts to creditors, amounting to about 180 billion rupees ($2.20 billion). - Despite being cleared to resume commercial flights, the airline's comeback as Jet 2.0 has been delayed due to differences between its current owners and lenders. 3. Kingfisher Airlines: - Owned by businessman Vijay Mallya, Kingfisher Airlines ceased operations in 2012 after facing heavy losses following a merger with a low-cost carrier, Air Deccan. - The airline owed lenders, including the State Bank of India, a substantial amount of 9,000 crore rupees. 4. Air Costa: - In November 2019, the bankruptcy court initiated a corporate insolvency resolution process for Air Costa, a grounded regional low-cost airline. - The Directorate General of Civil Aviation (DGCA) had suspended Air Costa's flying license in June 2017, resulting in the airline permanently ceasing operations. 5. ModiLuft: - ModiLuft, launched in 1993 by industrialist SK Modi in partnership with Lufthansa, faced financial challenges and alleged funding issues with Lufthansa in 1996. - The airline was later sold to UK-based Bhupendra Kansagra, who renamed it Royal Airways, but it remained defunct for a period despite retaining its license. 6. Air Sahara: - Air Sahara, owned by businessman Subrata Roy of Sahara Parivar, was a rapidly-growing airline with cheaper tickets and wide connectivity in domestic and international routes. - Founded in 1991, Air Sahara was taken over by Jet Airways in 2006 for $545 million. 7. Paramount Airways: - Paramount Airways, based out of Chennai, started as an airline catering to business travelers in 2005, focusing on South and East India routes. - The airline was the first in India to launch the New Generation Embraer 170/190 Family series aircraft but closed its operations in 2010 due to mounting debts. To add a few more to the list Vayudoot, MDLR Airlines, Air Pegasus, Air Deccan, Air Mantra, Indus Air. Do you see any patterns or reasons recurring across these cases? GO FIRST, IndiGo (InterGlobe Aviation Ltd), Air India Limited, Vistara - TATA SIA Airlines Ltd., Air India Express, Akasa Air #airlines, #travel, #aviation, #pilot, #cabincrew, #holidays, #passengers, #insolvency, #bankruptcy
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NAFA member Juan Carlos Ferrer, Partner with Holland & Knight LLP, discusses the important differences between domestic and cross-border aviation finance transactions. #NAFA #AviationNews #AviationLovers #Aviation #BusinessAviation #PrivateAviation
Comparing and Contrasting Domestic vs. Cross-Border Aviation Finance Transactions
nafa.aero
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Financing is a complex area for aircraft owners to navigate. Beyond the interest rate involved, how can you tell if you’ve got a good deal that’s fair to both parties? Gerrard Cowan asks aviation finance experts for their tips. #NAFA #AviationNews #AviationLovers #Aviation #BusinessAviation #PrivateAviation
How to Tell if Your Aircraft Finance Deal is Fair
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