The impact of COVID 19 continues to be felt on the global aviation sector with Regional German carrier Luftfahrtgesellschaft Walter (LGW) and Air Mauritius both going bust, having filed for insolvency and been placed in voluntary administration, respectively.
On Wednesday, April 22 the Düsseldorf Local Court appointed attorney Dirk Andres as provisional administrator for the German airline, which was exclusively providing wet lease services to Lufthansa subsidiary, Eurowings. Attorney Michael Wilbert will also join the company’s management as a further managing director.
Air Mauritius meanwhile has appointed accountants Grant Thornton to manage the airline’s voluntary administration process. A statement announcing the move explicitly referenced COVID 19, and recent airline insolvencies.
“This week, we have taken note of statements by Virgin Australia and South African Airways to the effect that they will be placed under voluntary administration. The situation is hardly different for Air Mauritius, due to its high degree of reliance on tourism, which is one of the most affected sectors when it comes to the Mauritian economy,” said Sattar Hajee Abdoula, chief executive of administrators Grant Thornton in Mauritius.
Dominik Wiehage, managing director of LGW also said that COVID 19 had forced the carrier to end flying and was a direct consequence of changes to Eurowings’ business.
“We very much regret that we were forced to take this step by the Corona pandemic. We had our 15 De Havilland DHC-8 aircraft in a long-term cooperation exclusively with the Lufthansa subsidiary Eurowings. Eurowings had to decommission around 90% of its own fleet and terminate the wet lease contract with LGW at short notice in view of current developments.
After the termination of the cooperation by Eurowings, we have made intensive efforts to find employment for our LGW aircraft throughout Europe and will continue to do so in our own management. Due to the almost complete standstill of air traffic, these efforts have unfortunately not been successful so far.
Wiehage said it was also impossible to estimate whether the firm would receive public funds to bridge the period until air traffic resumes, especially on the regional routes served by the LGW, and said the firm, “must therefore draw the legally necessary conclusions”.
LGW currently employs 354 people, 294 of them in the flying sector, 60 work on the ground in technology and administration for the company, which has its headquarters in Düsseldorf. The fleet of 15 De Havilland DHC-8 is currently parked at the airport of the Slovakian capital Bratislava.
The main difference between administration and insolvency is the former aims to help the company repay debts in order to escape insolvency, which involves liquidating all assets before dissolving the company completely, and Abdoula was keen to stress the intention to keep Air Mauritius as a going concern.
“As administrators, our mission is above all to save the company. We know that the national airline is a key player in our economy and that it is part and parcel of our history…In such difficult times, it is essential that we get down to work without delay, along with all the partners of this industry in Mauritius, to implement the measures deemed necessary to save the national airline,” said Abdoula.