To overcome a financial crisis an Airline has to consider the restructuring of its financial obligations, especially with regards to the aircraft fleet
The basic thesis of an airline financial restructuring is that both lessors and banks always regard the airline itself – even if it is currently barely solvent/ not solvent – as the best “asset manager” for its aircraft. This circumstance must be professionally exploited by strengthening confidence through a high degree of transparency and competence that the asset is being managed in the best possible way, while at the same time making it clear that, unlike the technical obligations, the financial obligations cannot be met or can only be met at a later date.
M2P the challenges of an airline financial restructuring in multiple ways:
- Create confidence among lessors and banks with regards to the intended restructuring as only an undisturbed operation ensures that the value of the assets is secured in the best possible way.
- Establish trust regarding the followings points: (i) continue operation, (ii) stabilize cash flows, (iii) manage the assets properly, (iv) create transparency regarding the mx status and documentation of aircraft, (v) present a solid strategic roadmap for business, (vi) allow the market/property values to recover, (vii) allow lessors/guarantors in a coordinated process to sell assets which are no longer needed.
- Creation of threat potential where it is necessary to fix lease/loan documentation or collateral deficiencies (amendment of terms, revision of return conditions, incorrect cross-collateralization or cross-default language, unperfected liens, missing collateral, etc.) to “discipline” lessors and lenders.
With the scope of financial restructuring M2P provide its clients a holistic workout support consisting of commercial / operational, technical and legal scope items.
