newstodate.aero
Nov 02, 2017 (newstodate): 2017 is not exactly a year of plain sailing for the Swedish/UK carrier West Atlantic.
During 2017, the company has reported negative results, to a great extent due to high start-up costs caused by delayed deliveries of aircraft for the new Royal Mail contract, which is the company's largest contract ever.
The contract requires West Atlantic to build up a fleet eventually comprising nine Boeing 737 freighters and three British Aerospace ATP aircraft to serve the five-year contract with Royal Mail, effective from January 1, 2017.
Delivery delays have forced West Atlantic to sub-charter aircraft from other airlines, incurring double the cost for many items during the period January-September 2017 as reported in the Q1 and Q2 interim reports.
Consequently, the company does not fulfill the "Maintenance Test" as per September 30, 2017 as stipulated in The Terms and Conditions of the company's corporate bond loan.
A turnaround and a return to profit is foreseen in Q4, not least because of an expected sales of excess ATP freighter aircraft capacity.
If the aircraft sales are not concluded during Q4, the company might once again have difficulties to fulfill the "Maintenance Test" as per December 31, 2017.
A re-capitalization of the company may thus be required to meet the financial obligations.
During 2017, the company has reported negative results, to a great extent due to high start-up costs caused by delayed deliveries of aircraft for the new Royal Mail contract, which is the company's largest contract ever.
The contract requires West Atlantic to build up a fleet eventually comprising nine Boeing 737 freighters and three British Aerospace ATP aircraft to serve the five-year contract with Royal Mail, effective from January 1, 2017.
Delivery delays have forced West Atlantic to sub-charter aircraft from other airlines, incurring double the cost for many items during the period January-September 2017 as reported in the Q1 and Q2 interim reports.
Consequently, the company does not fulfill the "Maintenance Test" as per September 30, 2017 as stipulated in The Terms and Conditions of the company's corporate bond loan.
A turnaround and a return to profit is foreseen in Q4, not least because of an expected sales of excess ATP freighter aircraft capacity.
If the aircraft sales are not concluded during Q4, the company might once again have difficulties to fulfill the "Maintenance Test" as per December 31, 2017.
A re-capitalization of the company may thus be required to meet the financial obligations.