On Friday, Avantair president and COO David Haslett updated customers on the current status at the shut down fractional provider and said that a plan to resuscitate the Clearwater, Fla.-based company is being developed. He also assured shareowners that their aircraft are still insured and “on the ground” at maintenance bases.
“Our business model assumed efficiencies that never materialized and a pricing schedule based on those efficiencies,” he said. “Over the past few months, we encountered issues that drained the company’s working capital. As our service was impacted and we were forced to ground our fleet temporarily, charter costs skyrocketed and our accounts receivable grew as it became increasingly difficult to collect on outstanding amounts due. It is apparent that Avantair must restructure.”
In addition to restructuring the balance sheet, Avantair plans to revise its pricing to ensure “profitable operations” in the future, he noted. “Over the next several days, the company will be validating the fees we charge and a new business model will be presented to the owner group.”
Avantair is currently in discussions with vendors, lenders and other third parties to obtain the working capital needed to restructure and fund operations going forward, Haslett said. It also needs to win over its share owners, a daunting task given its difficulty in providing reliable service over the past nine months.