Fri, Jun 28, 2013
Company Seeks Additional Financing To Resume Flying
Fractional company Avantair has grounded its fleet of Avanti P-180 airplanes and has furloughed pilots and other employees as the company seeks a cash infusion to begin flying again.
In a filing with the SEC Wednesday, the company said that it has "commenced employee furloughs as the Company addresses liquidity issues and seeks alternative financing arrangements that it hopes will enable it to resume operations as quickly and efficiently as possible. In addition, on June 24, 2013 the Company received notice of service of a class action lawsuit filed by Heisman Square, L.L.C. in Oklahoma County District Court, Oklahoma."
The Clearwater, FL-based company is in danger of having some of its airplanes repossessed as well. The filing indicates it has "entered into a Forbearance Agreement with Midsouth Services, Inc. and Clear Aircraft, Inc. (“Lessor”) related to past due lease payments for certain core fleet aircraft leased to the Company by the Lessor. On June 18, 2013 and June 25, 2013, the Company was notified by the Lessor that it was in breach of the terms of the Forbearance Agreement and the Lessor has been exercising and will continue to exercise all rights and remedies available under the Forbearance Agreement and applicable law, including taking possession of its leased aircraft and aircraft engines."
The Tampa Bay Times reports that the company has experienced safety issues, with the entire fleet grounded twice in the past eight months to conduct safety reviews. The left elevator on one of the company's planes separated from the aircraft in flight last summer prompting the first grounding. After the planes were cleared to fly, a potential inspection issue with time-sensitive parts forced a second grounding June 7. The planes appear to have been grounded since that date.
The lawsuit states that the company has not "adequately" served its customers since employees were furloughed last October.
(Avantair P-180 image from file.)
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