The long struggle of Avianca Brasil came to a forced landing or perhaps a gained a respite last Friday when Brazilian regulator ANAC suspended operations at the airline’s request. Airport slots stand as Avianca’s remaining asset, but they represent merely permissions it must exercise to maintain control and cannot sell, but only transfer to another airline. Avianca entered Chapter 11 bankruptcy protection in December and started this year with 53 aircraft. Courts stalled lessors’ efforts to repossess aircraft until a creditors’ assembly approved a plan in April, after which time aircraft owners successively repossessed their assets. Meanwhile, Avianca cut routes until, with no more than six aircraft available, it appealed for the suspension, which might preserve its rights to the slots. In January the airline employed 5,563 people and by the end of May only 2,687, many who hadn’t received pay for two months. The bankruptcy administrator plans to cut payroll by a further 1,000 in June.

In March, Brazilian competitor Azul offered $105 million for Avianca’s prized landing slots at São Paulo’s Congonhas airport and corresponding routes and slots in Rio de Janeiro and Brasilia, along with the airline’s operating certificate. Hoping to assume some Airbus leases, it would have kept about half of the employees. Leading airlines TAM and Gol countered in April with a proposal to divide the airline into seven pieces for auction, sharing the operational certificate, and each promising to bid $70 million for a slice. The auction had to be postponed when Swissport, owed about $4.2 million and dissatisfied with the prospect of receiving a fraction of a cent on the dollar, sued and won a restraining order. Azul then offered $145 million for selected slots, but the bankruptcy judge rejected it last week.

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