Avantair Unveils Details of ‘Go-forward’ Plan

 - July 9, 2013, 3:35 PM
Avantair ceased operations in late June, seeking new financing. If it implements its ‘go-forward plan’ the company expects it could resume operations early next month. (Photo: Matt Thurber)

On Wednesday, Avantair sent out its “go-forward plan” for “NewCo,” the working name for a reborn Avantair, that would first seek to “restructure and stabilize the business” as a mostly East Coast-only fractional provider. Under the plan, the company’s debts would be wiped out, though the plan does not specify how that will be accomplished.

NewCo would also downsize employees to a “core group” and secure additional financing. NewCo would also need to retain at least 300 of the 620 fractional shareowners. Its fleet–currently at 56 airplanes–would be pared to 25 aircraft.

Those shareowners opting to stay with the new Avantair would have to pay a one-time assessment of $25,000 for a “catch-up maintenance fund” to bring the fleet to airworthy condition. Monthly management fees–which also include 1/12th of owners’ annual occupied time–would rise by nearly 40 percent, to $15,846.

The new Avantair would also need “$4.5 million in funding to finance Avantair’s restructuring process and permit NewCo to emerge with sufficient working capital.” In addition to this, Avanti manufacturer Piaggio Aero has pledged to provide a $1 million investment and another $1 million in credit facility on parts.

If it can attract the required number of customers and the necessary financing and shed its debt, the new Avantair–which will be rebranded–could start operations early next month, the plan says.

Comments

Eric's picture

So now everything is fixed? Ready for takeoff?

So what happens to all the employees who were not paid for their last three weeks work? Or the Edge Card owners who "had" prepaid flight hours before Avantair shutdown? Or the vendors that Avantair did not pay? Or the numerous lawsuits that have been filed?

How can Avantair just be "reborn" without addressing these significant issues? Not only should existing owners and vendors go after Avantair for payment, but if there is no bankruptcy filing, how can those obligations just be "wiped out"? And if there is a filing, those same owners and vendors would be lucky to get pennies on the dollar and probably would not be too happy to put money back into the new company, or provide services to support it.

There is a serious "suspension of disbelief" in this go-forward plan. Does Avantair think that everyone involved will just forgive and forget?

Captain Dan's picture

Burn me once, shame on you.
Burn me twice, shame on you.

I pity anyone who buys into this cr@p!

Go to airlinepilotcentral.com to read what former employees say about their experiences with Avantair, the sketchy maintenance and the unfair treatment of employees. There is nothing redeeming about this company. Santos wants more money to pad his pockets, pay for his sports car, his Aspen home, his yacht in the Bahamas, etc. I hope that no one give any serious consideration to this insane plan.

Captain Dan's picture

Anyone who would invest fresh capital into this mess is completely delusional. This company is toast. It will be haunted by lawsuits for years to come. The only way to salvage cents on the dollar is to find out who owns the other 15/16 of your particular airplane, get a majority to agree to "claim" it from the company, hire a consultant to inspect (and hope it isn't one of the planes used for parts or salvage), and figure out who will pay the most for it.

Piaggio Flyer's picture

Most of the owners can afford a fractional share because they are smart, sucessful and have made intelligent decisions. To think they will buy this rubbish from Santo, and continue to throw money at beating this dead horse is insulting.

The owners need to get together, reclaim their aircraft, have it inspected, and each contibute their share to get it airworthy again, then send "ConCo" the bill.

Don't let these incompetent bafoons throw any more of your money into the fire.
(Or into the gas tank of Santo's yacht!)

Piaggio Flyer's picture

Most of the owners can afford a fractional share because they are smart, sucessful and have made intelligent decisions. To think they will buy this rubbish from Santo, and continue to throw money at beating this dead horse is insulting.

The owners need to get together, reclaim their aircraft, have it inspected, and each contibute their share to get it airworthy again, then send "ConCo" the bill.

Don't let these incompetent bafoons throw any more of your money into the fire.
(Or into the gas tank of Santo's yacht!)

Piaggio Flyer's picture

Most of the owners can afford a fractional share because they are smart, sucessful and have made intelligent decisions. To think they will buy this rubbish from Santo, and continue to throw money at beating this dead horse is insulting.

The owners need to get together, reclaim their aircraft, have it inspected, and each contibute their share to get it airworthy again, then send "ConCo" the bill.

Don't let these incompetent bafoons throw any more of your money into the fire.
(Or into the gas tank of Santo's yacht!)

MJD Aircraft's picture

Are you an owner of 131SL? If so, have you registered on the pilot's forum and joined the other owners of this a/c ?

another N131SL owner's picture

please respond with contact info so we can connect with other owners of this aircraft

N131SL's picture

I have your 25K......

It's called a lawyer :) Just saying Steve-O.

another N131SL owner's picture

How do we connect with other owners of this aircraft?

Watcher's picture

Avanti owners can start on this board ( months of information) http://avantairowners.freeforums.net/index.cgi

To start connecting to other owners this page will show you how to apply for and get on vnrpilots.com. http://avantairowners.freeforums.net/index.cgi?board=general&action=disp...

Good luck, the fall out of Avantair is going to through ripples throughout the industry.

Avantipilot's picture

Can't wait for CNBC to make an episode of this one. And for those even contemplating throwing more money down the toilet, here's a snippet from the next letter. "We would like to thank the owners who stepped up and invested $25,000 each. Unfortunately those pesky employee's wanted their pay checks and the nasty judge said we had to pay them what we owed them, therefore we will need an additional $25,000 from all of you."

Then Pratt & Whitney, then parts suppliers, then FBO's, then fuel vendors, the Edge card settlements.

Its like buying up more stock in Lehman brothers all the way to the end. Smart people know when to cut their losses.

another N131SL owner's picture

I am an owner of N131SL. How do we connect up with other owners of this aircraft?

vnr insider's picture

Go to vnrpilots.com and sign up, once registered you will be able to find other owners by tail # and communicate with the people that flew your planes and know the truth ...

Frederick Medlock's picture

Dear former Avaintair fractional owners.

If you need assistance in appraising what is left of your fractional share for legal proceedings I would be happy to assist. I have performed Avanti appraisals in the past. My reports have been admitted in the Florida courts. In addition to being a pilot I am an A&P IA and senior aircraft appraiser. I can also testify on your behalf as an expert witness in any legal claims. At the very least we can put a value on your loss for IRS considerations.

Kind Regards,

Captain Fred Medlock, President
Avworth Aviation Consulting Inc. www.avworth.com 800-616-0966

Douglas  E  Carper's picture

Are you kidding...asking for each owner to get current on their billing, then an assessment of $25k each, regardless of their underlying tail number. Some planes are worth more than the others...obviously and the mechanics liens on the parked airplanes vary tremendously. The only way out here is bankruptcy...which mysteriously hasn't happened? Could it be that management and the board of directors are afraid of what the bankruptcy judge will find out? The airplanes are the only blood left and its not Avantair's blood...it belongs to the abused owners. Its time to stop this nonsense about "newco"...a illogical and ridiculous idea. Get the bk started and let an outsider, ie. judge begin the process of an orderly liquidation. Finally then, this whole sad chapter can be finished.

American Greed's picture

Is somebody to unload all the trash above the DO, The plan is good, the Plane is good. The 2nd floor is trash. Put new principles in place and this company can do a fine job. If an owner can think back 4 years before the top floor started the money grab. You may remember a good company. One that had great customer Serivce.

Douglas  E  Carper's picture

I beg to differ..the plan is ridiculous and will not hold up under closer scrutiny if you have any business/legal sense at all. The facts are that the vast majority of the fleet is in terrible shape and would require more money spent on the planes than what the used Piaggo market is. These planes are largely "worn out"....these are not commercial airliners. We all enjoyed flying with Avantair when everything was new and fresh, but the experience spiraled into a very challenging and I dare say, a dangerous one, too. Give it up folks....this is over and the quicker we have BK judge handle this the better.

Geo's picture

This is not a serious article by AIN, just parroting of the Avantair propaganda. I believe some folks are going to prison over this train wreck.

Your readers deserve better.

Kevin Flintstone's picture

It's an article reporting what was contained in the letter that went out to owners, and Chad didn't put any spin on it. How is that bad? I can make my own decisions on how ridiculous their attempt to appease owners is.

AirMech's picture

Was with the company for 5 years. Experienced it when times were good and got laid off when it folded.
As a mechanic the biggest problem was the plane itself. It's a sports car being used as a Taxi cab and was never designed for that kind of abuse. It was a plane that was designed for maybe 150-200 hrs a year and we were putting that much on in a couple months.
Parts, Parts, Parts! The biggest problem we had in Maintenance was getting parts from Piaggio. This isn't a Cessna Citation you can just get parts from a local distributor or even overnight from Kansas. Parts that failed on a regular basis sometimes had 90 day lead times and that was before getting them shipped through customs.
Planes would come in for a A,B,C or D check and before we could get it in the hanger we were stripping parts off it to get another plane in the air. Anytime you have more planes sitting in a hanger in pieces just to keep a couple in the air you have issues.
Add to that the mismanagement from the top and the company growing too fast too soon (greed) and it's a recipe for disaster.

The guys that worked on the planes cared about their job and they did everything in their power to keep these planes flying and safe, but there is only so much you can do with no parts, a horrible support structure, and mismanagement at the top.

john doe's picture

This was a long time coming. You will see the change in the executive team going back for years. Simply because no one wanted to follow Santos instructions on how to operate the company safely. You will also see that there have been a number of accidents with the Avantair Piaggios with aircraft coming in with no landing gear like the one in HPN that landed on its belly. Then a aircraft that had a gear collapse down in Florida and the engine struck the runway causing the blades to cut into the side of the plane. The best is the one out in I believe Pontiac where the Piaggio came in and flipped over. But the one that was the final nail in the Avantair coffin was the elevator that came off last year exposing what most people already knew about..... the horrible maintenance record. There have been many times where the FAA has questioned the logs and for good reason. The Piaggos are sensitive planes that are hand made much in the way a Ferrari is made. They are not made to handle the work load of a taxi. More time in the hangar = more money out of pocket for the owners but the executive team didn't want to price the program beyond the price of the competitors. Interesting how the SVP of Sales left and returned to the company multiple times and now he is over with Flight Options. Perhaps he saw what was going on and what was coming. The owners might also want to look into the fuel being purchased down at the Avantair HQ in PIE and the company that supplies the fuel. The only executive team member who hasn't left is the Executive Vice President who happens to run the company that sells the over priced fuel to Avantair and is then charged over to the owners. Interesting indeed how pockets are being padded.

JAY's picture

LET THEM PROCEED TO BRING THE CO UP TO SPEED THEY WILL PROTECT OWNERS AND SHAREHOLDERS ALIKE THEY JUST NEED BREATHING SPACE

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