Virgin Australian Airlines appointed insolvency administrators on 20 April 2020, when its debt servicing burden became unsustainable.
The successful bidder for the Virgin Australia Group will operate a simplified all-Boeing 737 mainline fleet and the retention of the regional and charter fleet. This means that half the fleet which consists of ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types is unwanted. The unwanted aircraft were mostly under finance or lease.
Usually when an airline goes into liquidation, lessors and financiers will immediately repossess their aircraft and fly them away.
But in these Covid-19 times, the Virgin aircraft financiers were in no hurry. No one was lining up to lease aircraft. Wells Fargo and Willis decided to request the insolvency administrator to deliver up the aircraft engines to their facility in Florida.
The administrator refused, not wanting to pay the cost of delivery.
What’s to happen has been decided by the Federal Court: