- Chorus Aviation Inc (TSX:CHR) has announced that eight of its aircraft have ceased operating after British airline Flybe went into administration
- The three ATR 72-600 and five Dash 8-400 aircraft comprise around 5 per cent of Chorus’s leasing portfolio
- Flybe was adversely affected by the COVID-19 outbreak and went into administration after it failed to find refinancing sources
- Chorus is currently repossessing and re-marketing the aircraft
- Chorus Aviation Inc (CHR) is down 5.63 per cent, with shares trading for C$6.05 and a market cap of $970 million
Chorus Aviation Inc (TSX:CHR) has announced that eight of its aircraft have been grounded after British airline Flybe went into administration.
Chorus had three ATR 72-600 and five Dash 8-400 aircraft on lease with Flybe. The grounded aircraft comprise five per cent of Chorus’s leasing portfolio.
Flybe moved into administration after failing to generate new financing. The company stated the impact of the COVID-19 outbreak on the industry tipped it into insolvency.
Before collapsing, Flybe provided more than half of the domestic flights in the U.K. from outside of London. Chorus Aviation specialises in maintaining and acquiring aircraft and leasing them to regional airlines like Flybe.
As a result of the collapse, Flybe cancelled all planned flights. The U.K. airline employed more than 2,000 people.
Steven Ridolfi, President of Chorus Aviation Capital, assured shareholders that impacts were being mitigated.
“We have planned for this contingency and are executing against our plan.
“We are currently in negotiations with prospects for these aircraft. As noted, these aircraft represent only a small portion of the value of our leased aircraft portfolio,” he said.
Earlier this year, Air Canada announced it was suspending flights to Beijing and Shanghai due to COVID-19 concerns. Ongoing uncertainty around the outbreak continues to adversely impact the industry. As a result, in the last month, Chorus Aviation’s share price has dropped almost 25 per cent.
The company has not yet announced how long the aircraft will be grounded. However, Chorus is currently managing their repossession and re-marketing.
Chorus Aviation (CHR) is down 5.63 per cent, with shares trading for C$6.05 at 12.39pm EST.