Ukrainian airline AeroSvit on Friday announced that it had commenced bankruptcy proceedings in late December.
Much like Chapter 11 bankruptcy in the United States (like the one American Airlines is currently undergoing) the proceedings in Kiev will allow AeroSvit Airlines to reorganize and restructure. “Planned company’s reorganization forms part of the change program initiated by the airline in order to restore its operating efficiency and increase revenue inflows,” AeroSvit Airlines said in a press release.
The airline at Aerosvit had debts of 4.27 billion hryvnia ($520 million) versus assets of just 1.47 billion hryvnia ($183 million) as of December 27, 2012.
Currently, AeroSvit’s operations are not affected, and the airline says it will fulfill all commitments to its contractors. However, there are reports of several European airports refusing to allow AeroSvit flights due to the financial issues, among them Tbilisi, Prague, St. Petersburg and Stockholm.
In addition, according to Bloomberg, AeroSvit’s hub airport, Kiev’s Boryspil International, says it will not service any of the airline’s flights if outstanding bills are not paid by January 9.
Aerosvit currently has a fleet of 31 aircraft, including eight Boeing 767-300ERs, and is expecting
delivery of 3 additional Embraer E-190s later this year.
