Flybondi eyes lower lease rates: AFJ LATAM 2020 | News | Airfinance Journal

Argentinean ultra-low-cost carrier Flybondi plans a fleet of seven aircraft by the end of 2021, according to executive chairman Mike Powell.

“We plan to end the year 2020 with four aircraft in our fleet, maybe five aircraft if we can resume international services. That’s in the hands of the government,” he tells delegates at Airfinance Journal LATAM 2020.

Powell says Flybondi quickly returned three of its five aircraft due to the crisis.

“We saw as this as the best way of limiting the accumulation of legal liability on those lease contracts and enabling us to, when we have visibility of resumption of flights, bring replacement aircraft at the new market rates and new market terms.”

Currently Flybondi has two aircraft left in its fleet.

“We are looking to negotiate some concessions on those two remaining aircraft to make sure we are as competitive as we can be once we enter the psot-Covid-19 year,” he says.

“With a very liquid market in the aircraft type we operate, with an awful lot of leases due to end across the industry in the coming years, we think there will be plenty of opportunities to continue the straight operating lease model of NG we have adopted until now,” he adds.

Powell recalls that when Flybondi started in January 2018, its original plan was to operate 30 aircraft within five years.

“We stopped at five aircraft and this was the best decision we have made.

“We retain our ambition to grow the fleet to 30 aircraft over a five-year period,” he says.

He adds that the business plan calls for 9 million passengers by 2025, versus 1.7 million passengers in 2019.

Powell says Argentina has seen the longest and strictest lockdown in the world and all airlines had to suspend flights on 20 March.

The original date to resume domestic and international services was 1 September, but the summer period has seen a significant rate of infections in the country, which will trigger a delay in reopening flight operations.

“The new dates have not been defined but the transport minister has talked in recent days about resuming both domestic and international services on 1 October. That would require the health minister’s approval and the president’s approval, of course.”

Powell says Flybondi does not anticipate changing its financial model. “We are not in need of a huge amount of liquidity. We have reduced cash burn to very low levels – certainly to a level that is within the ability of our investors to finance until we resume flight operations,” he says.