“Time is our most precious commodity, and there are conveniences that wealth brings to essentially get you more time. —retired Microsoft CEO Steve Ballmer, explaining why he commutes via private jet from his Seattle home to watch games of the Los Angeles Clippers, the basketball team he bought last year for $2 billion. ”
Avantair Ceases Operations
Fractional provider Avantair shut down in late June and furloughed employees. At that time, in an 8-K SEC filing, the company said it “seeks alternative financing arrangements that it hopes will enable it to resume operations as quickly and efficiently as possible.” Also in late June, the Clearwater, Florida-based company received notice of a customer class-action lawsuit concerning the breach of a lease agreement for its six core airplanes, with their repossession by lessors a possibility.
Avantair’s 56 Piaggio Avanti twin turboprops have been grounded since June 6, when allegations that the company was not properly tracking time-controlled parts on its aircraft led to detailed inspections to ensure compliance with FAA regulations. The operator also suffered a nearly three-week grounding last October, prompted by maintenance issues surrounding an incident in which an Avantair Avanti shed an elevator during a flight.
Heisman Square, an Avantair fractional shareowner, filed the customer lawsuit in March, saying the incident that led to the first grounding should have been disclosed when it was buying a share in the program in August. On June 24, Avantair “received notice of service of [this] class-action lawsuit.”
As of this writing, the company is apparently involved in a fight to prevent its six core airplanes from being repossessed. On June 13, Avantair reached a forbearance agreement with Midsouth Services and Clear Aircraft related to past-due lease payments for these airplanes, the 8-K filing says. But on June 18 and 25, the company was notified that it was in breach of this agreement, “and the lessor has been exercising…all rights and remedies available under the [agreement] and applicable law, including taking possession of its leased aircraft and aircraft engines.”
Avantair also operates 43 fractionally owned aircraft and seven “leased and company-managed” Avantis, according to a June 13 SEC 10-Q filing that discloses its financial situation at the end of its fiscal third quarter, ending March 31. In the quarter, Avantair posted an $8.33 million loss, compared with a nearly $1.6 million loss during the same period last year. Its total deficit is $122.75 million, the filing says.
Check bjtonline.com for updates to this rapidly developing story. We will also have more in an upcoming issue.—Ed.