German charter carrier Aero Lloyd chose to ground its fleet of 21 Airbus A320s and A321s and enter administration in mid-October after a refinancing package devised by management consultants Roland Berger was rejected by its major shareholders and creditors.
The shareholders, Bayerische Landesbank, and a group of six other banks, which had been unsuccessfully trying to sell their stake in the carrier, were not prepared to invest the €100 million ($116 million) needed to recapitalise Aero Lloyd. This caused the carrier to file for insolvency and Frankfurt-based Walter & Walter was appointed as the administrator for the company. Its first task is to negotiate with the group of bankers for a short-term infusion of €23 million into Aero Lloyd to enable it to restart at least a partial service.
This step has to be taken before a longer-term strategy can be put in place to revive Aero Lloyd, although according to Alexander Kaiser of Germany's Cell Consulting, it might be good for the country's charter market if Aero Lloyd did go under. It could be a relief for the market,' he says. At present, there is an over capacity of 4,500 seats, with Aero Lloyd alone representing about 3,500 seats
Source: Airline Business
