Grounded Virgin Australia is considering going into administration as it races against time to get out from under a US$4.8b debt pile. Amid calls from the federal opposition leader, Anthony Albanese, for the govt to rescue the airline, it has hired insolvency and turnaround experts at Deloitte to work on restructure scenarios. It is believed that as part of the restructuring effort Virgin Australia has also hired the debt expert Jim McKnight of the investment bank Houlihan Lokey, who has worked on some of Australia’s biggest corporate collapses and rescues. Virgin Australia went into a trading halt Tuesday morning after the Australian reported it had hired Houlihan Lokey. <br/>
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Norwegian saw its share price nosedive when markets opened Tuesday following its April 8 proposal to convert debt to equity in order to qualify for state aid. Shortly after the Oslo stock exchange reopened following the long Easter weekend, Norwegian’s share price was at one point down more than 60% compared with when the market closed April 8. This was the first indication of investor appetite for the airline since it announced plans for bondholders, lessors and other creditors to become equity holders in the company by converting “substantial” debt to equity. The carrier’s CE, Jacob Schram, said the proposed measures were necessary to secure “the next tranches of the Norwegian govt state guarantee programme”. <br/>
Gol says it has reached an agreement with Boeing on cash compensation for the more-than-year-long 737 Max grounding, and the termination of 34 forward orders for the company. which operates a Boeing 737-only fleet, said Tuesday that it now has 95 aircraft on order, down from its 129 previously. Gol had to take its 7 737 Max aircraft out of its schedule after the type was grounded worldwide. The aircraft has been grounded buy global regulators since March 2019 and it is not clear when it will be recertificated. Brazil’s shutdown in mid-March of virtually all air traffic as a response to the coronavirus pandemic, set Gol on a course to design what it hopes will be a break-even cash-flow operation that would carry it through the next 90 days and beyond. <br/>
EasyJet founder Stelios Haji-Ioannou has sent a complaint to the UK's financial regulator about the airline's Airbus order, ratcheting up tensions between the company’s largest shareholder and its board. The airline and its founder have been battling for weeks over an Airbus order for 107 new aircraft, which he estimates will cost the airline GBP4.5b. Stelios argues the order should be cancelled in order to preserve cash in the face of the coronavirus pandemic that has left the aviation industry grappling with its biggest crisis in decades. Last week, EasyJet attempted to ease tensions by saying it would defer the purchase of 24 aircraft over 3 years. But in a letter to the Financial Conduct Authority, lawyers acting on behalf of Stelios said the airline breached the UK's Market Abuse Regulation and Listing Rules. <br/>
Wizz Air is cutting 1,000 personnel, nearly one-fifth of its staff, after its operation was reduced to a bare minimum by the coronavirus crisis. The airline says it has been forced to take the “difficult step” to make workers redundant, adding that it has also carried out additional short-term furlough of staff. Wizz Air has a fleet of Airbus jets and is planning to return 32 older aircraft by the end of 2022-23 as their leases expire, as part of its measures to trim costs and improve liquidity. It states that its balance sheet is still “very strong” with “excellent” liquidity including E1.5b in cash. Wizz Air has just ended its latest fiscal year, March 31, and has disclosed that it will take a Q4 charge of E70-80m relating to hedging losses. It expects, as a result, to record a net full-year profit of E270-280m for 2019-20. <br/>
Wizz Air is making plans to fly jets only two-thirds full to allow more space between passengers, it said Tuesday, as airlines voiced concerns that anti-coronavirus measures could blight their profitability long after travel restrictions end. Wizz Air CE Jozsef Varadi and the head of IATA both said single-aisle planes may be required to leave the middle seats on each side vacant to allow a degree of "social distancing" aboard. "We would basically be blocking a third of the airplanes," Varadi said. "A 180-seater would become a 120-seater." Alexandre de Juniac, IATA's DG, said leaving the middle seat vacant was among likely conditions for a resumption of air travel to be discussed with govts in a series of coordinated meetings around the world. <br/>
Air Arabia has joined airlines globally in seeking state support and plans to delay the launch of a new low-cost carrier as the Covid-19 outbreak continues to wreak havoc on the aviation industry, according to people familiar with the matter. The airline has asked the UAE govt for financial assistance, said the people. Details of the magnitude of the package haven’t been disclosed. Air Arabia Abu Dhabi, a joint venture with Etihad Airways slated to start flying by the end of June, has been put on hold, said the people. The two airlines intend to revive the plan when demand for global travel recovers from the impact of the pandemic, they said. Air Arabia called the report “baseless and speculative.” It said that preparatory work for the launch of the LCC “remains in motion and will progress as the market situation improves.” <br/>