Downsizing

 

This has been posted on other social media... It seems to explain why there are so many Airwork aircraft in Auckland at present... Meanwhile Airwork aircraft are continue to operate domestically and on trans-Tasman operations

New Zealand's Airwork defaults on $83.5mn loan

Airwork NZ (Auckland International) has defaulted on a USD83.5 million syndicated loan, according to an August 1 regulatory filing by its owner, Zhejiang Rifa Precision Machinery. Consequently, the carrier will accelerate the sales of its remaining aircraft-related assets to raise capital to pay down the debt.

"Airwork, a subsidiary of Zhejiang Rifa Precision Machinery Co., Ltd., signed a syndicated loan contract in April 2019 with all its existing and future (i.e. April 2019 and later) assets held as collateral," the filing reads. "On July 31, 2024, the principal of the syndicated loan due to be repaid was USD83,356,000 and NZD230,800 [USD137,000], respectively, equivalent to CNY596 million yuan [USD83.5 million] in total. As of the date of disclosure of the announcement, the loan was overdue."

Having already sold four airframes and four engines "to improve its financial situation", collecting CNY52 million (USD7.4 million) in the process, the filing says Airwork will speed up the sale of its remaining unsold aircraft and engines and use the funds from that to pay down the debt. The filing adds that the management and board of Airwork are working with lenders to "reach a consensus" and resolve the overdue loan problem as soon as possible.

"Airwork are actively negotiating with our banking syndicate and cannot provide any further comment at this point in time," CEO Daniela Marsilli told ch-aviation.

Rifa Precision also says that Airwork may face the risk of paying relevant liquidated damages, late payment fees, and penalty interest because of the overdue debt. It may also face the risk of early expiry of the terms agreed to in the loan contract, in addition to the risks of enforcement, litigation, seizure, and freezing. Rifa adds that while it does not provide guarantees for Airwork, it remains an important subsidiary of the company

Airwork owns Airwork Flight Operations, which operates 15 aircraft - two B737-300(F)s, one B737-300(SF), and twelve B737-400(SF)s - although seven of these, including both -300(F)s and the -300(SF), are AOG. The aircraft fly domestic and trans-Tasman sectors, including doing work for Qantas Freight and Toll Aviation. According to ch-aviation fleets data, Airwork or entities associated with it own all 15 aircraft.

The Australasian air freight market has become increasingly competitive in recent years, with major offshore cargo carriers setting up shop in the region, including Bahrain's Texel Air establishing Texel Air Australasia, ASL Aviation Holdings acquiring Pionair Australia and rebranding it to ASL Airlines Australia, and Avia Solutions Group acquiring Skytrans with plans to transform it into an AMCI passenger and freight operator.