LONDON – Yesterday, Blue Air (0B) announced the start of the preventive arrangement procedure to be able to fulfill all commitments to its passengers, employees, and partners and to be able to resume regular flights after 4 months of total or partial flight suspensions.
In the context created by the COVID-19 pandemic, the entire aviation industry has been greatly affected by the flight suspension measures which needed to be taken by the Romanian and European authorities during the state of emergency and by the travel restrictions that are still in effect during the State of Alert.
As of July 1, the company has resumed scheduled flights to 29 destinations and is planning to resume operations to at least 47 destinations once the State of Alert ends and all restrictions are lifted by the authorities of the states in which it operates.
Therefore, in order to ensure the smooth resumption of scheduled flights and to meet all commitments to its passengers, employees and partners, Blue Air Aviation S.A. has resorted to the composition agreement procedure.
A composition agreement is an agreement made between an embarrassed or insolvent debtor and two or more of his creditors, that each of the creditors entering into the agreement will be paid a specified amount, less than the whole of their claims, and the creditors agree to accept such payment in full satisfaction of their claims.
Statement from Blue Air
“We, at 0B, are determined to honor all our commitments and pay all our debts.We are relying on the support of our partners and on the trust and mutual respect we have built throughout our collaboration and we are taking all necessary steps to continue to operate according to the highest standards in the field,” said Oana Petrescu (51), 0B CEO.
Petrescu also add, “We are confident in the support of our partners, colleagues and collaborators.
Together we will overcome this situation that is extremely challenging for 0B and for the entire aviation and travel industry, and we will continue to offer our passengers ever better travel solutions, both in terms of quality of service, and in terms of competitive prices.”
Start of the preventive arrangement procedure
Yesterday the judge has accepted 0B Aviation’s request to enter the arrangement procedure.
This procedure is part of 0B’s restructuring strategy as a result of the context created by the COVID-19 pandemic, which in March-June 2020 led to a decrease of more than €100m in revenues compared to the level estimated and planned for this period.
By entering the preventive arrangement procedure, 0B will be able to ensure that priority is given to covering the costs related to the operation of regular flights starting July 16, at the end of the State of Alert.
With the reopening of the normal flight schedule, 0B will be able to generate, in the next 18 months, the revenues necessary to cover both the due installments that are part of the composition agreement and the obligations to its passengers and agents.
While the losses generated by the pandemic will be covered by the State Aid approved by the Romanian Government through the Memorandum of April 23, 2020.
The composition agreement is a safeguard procedure by which debtors in financial difficulty (not insolvency!) can reach a formal agreement with their creditors regarding the payment of debts and by which they can ensure the continuity and viability of the company, so that it is able to pay off its debts and continue its activity.
This procedure aims to create a solid ground that will allow the company to overcome this difficult period. During this procedure, 0B will benefit from the assistance of KPMG Restructuring SPRL (the restructuring department of KPMG Romania) as a formal contracting administrator and restructuring consultant.
The decision to access and implement this procedure was made on the basis of constant communication with the main partners, who are in complete understanding of the complexity of the economic situation triggered by the pandemic.
Source: Blue Air Press Release