Covid-19 Aviation Restructuring Report 2.0

Over a year on from the start of the pandemic, those airlines that have so far survived the crisis continue to face a challenging and uncertain outlook. The International Air Transport Association estimated that the airline industry lost US$118.5bn during 2020, with full-year traffic down 66% on 2019 and passenger traffic not expected to return to pre-2019 levels until at least 2024. Hopes that revenues would begin to recover with the start of the New Year and vaccine roll-out were dampened as new variants of the virus emerged and governments in Europe and beyond re-imposed lockdowns and travel bans. While 2020 saw a raft of airline insolvencies and restructurings, many in the market expect that there will be still greater numbers in 2021 and into 2022.

The first edition of this report in April last year, when the length and scale of the Covid-19 pandemic was yet to be seen, set out the principal issues that market participants were likely to encounter as well as the restructuring techniques that had been developed and successfully employed in other industries, such as the helicopter and maritime sectors.

This updated edition explores how the market’s response has developed, the trends that have emerged and some significant changes to legislation in the UK. This edition also incorporates a valuable table comparing the key features of a UK scheme of arrangement, a UK restructuring plan and the US’s Chapter 11 rehabilitation procedure, as well as case studies on the restructurings of Virgin Atlantic Airways and Malaysian Airlines Berhad.