Skip to content

Allen & Overy helps aviation clients navigate Covid-19 turbulence

Related people
Nelson Paul
Paul Nelson



View profile →

Press contacts

For media enquiries relating to this topic, please contact:

Image of Ben Davies, Senior Media Relations Manager
Ben Davies

Senior Media Relations Manager


View profile →

07 September 2020

With global air travel down 95% due to Covid-19, Allen & Overy is advising on some of the biggest deals keeping airlines in business. 

Although almost every sector is currently feeling pressure because of the Covid-19 pandemic, few have been as hard hit as the aviation sector. At the low point in April, global air travel was roughly 95% below 2019 levels, with multiple large airlines having temporarily ceased operations.

With many countries enforcing travel bans and planes being grounded for long periods, airlines have needed to review their business models and look for funding.

How can A&O help clients in the aviation sector?

Over the last few months, teams across our practice areas and offices have been acting for many industry players, helping businesses to weather the storm caused by Covid-19.

London-based partner, Paul Nelson, Head of Aviation Finance, explains: “We have a significant track record in the aviation sector globally and are well-hedged in our ability to advise a number of stakeholders whether that be airlines, banks, export-credit agencies, operating lessors or funds.

“There will inevitably be a rationalisation of the market and there will be winners and losers in the sector. Above all, clients are looking for advisors with our breadth of experience and ability to see the trends happening across what is currently an uncertain market. We are already winning roles in some of the biggest transactions.”

Below are examples of some of the standout deals we’ve acted on recently.

A&O advises French state on Air France funding

A&O has been appointed as the global legal adviser to the French state as it implements exceptional measures aimed at supporting strategic companies in the country through the Covid-19 outbreak.

As part of this role the A&O team in Paris advised the French state, acting through the Agence des Participations de l’Etat (APE), on the EUR7 billion liquidity funding it granted to Air France (the French arm of Air France-KLM).

The financing is the largest financial support package so far granted by the French state during the Covid-19 epidemic.

The A&O team was led by Paris-based partners Marc Castagnède and Julien Roux who were supported by the Paris corporate team with partner Frédéric Moreau, counsel Olivier Thébault and associate Jade Billère-Mellet, the Paris public law team with partner Romaric Lazerges and counsel Luc Lamblin, the Paris antitrust/State aid team with partner Florence Ninane and senior associate Alexandre Fall, the Paris ICM team with partner Hervé Ekué and the Paris regulatory team with partner Brice Henry and senior associate Eric Roturier.

A&O advises Dutch airline KLM on securing EUR3.4 billion in financing

A cross-practice team from Amsterdam advised Dutch airline KLM on securing EUR3.4 billion in financing from a syndicate of 11 domestic and foreign banks and the Dutch state. The financing package will help KLM maintain business continuity through the Covid-19 crisis and strengthen its position for the future.

The A&O team was led by partner Niels de Ru (Banking) together with Andrew Thomas (Banking). Further specialist advice was provided by partners Kees Schillemans (Competition), Tim Stevens (Corporate), Suzanne Sikkink (Employment), and Arnold Croiset van Uchelen (Litigation).

A&O advises the underwriters for EasyJet’s share placing

A&O is adviser to BNP Paribas and Credit Suisse Securities (Europe) Limited as joint global coordinators and joint bookrunners to easyJet plc on its placing of ordinary shares, raising gross proceeds of GBP419 million.

A leading European low-cost airline, easyJet operates more than 300 aircraft on 979 routes across 30 countries. The vast majority of easyJet’s fleet has been grounded since March 2020, with the airline only operating a small number of repatriation flights. As Covid-19-related travel restrictions have begun to ease, easyJet has gradually resumed flying and intends to fly 155 aircraft during the peak European summer season. 

The A&O team was led by London Corporate partner James Roe and U.S. Corporate Finance partner Jeff Hendrickson. The transaction team included senior associates Harsha Kumar and Julian Veshi and associate Philip Whitehead. James Roe and U.S. Corporate Finance partner Jeff Hendrickson.

A&O advises on Cathay Pacific’s HKD11.7 billion rights issue

A&O advised the underwriters in Cathay Pacific’s announced HKD11.7 billion rights issue as part of its HKD39 billion recapitalisation plan. Morgan Stanley acts as the sole financial adviser to Cathay Pacific’s recapitalisation plan, and together with BOCI, HSBC and BNP Paribas act as the underwriters in the rights issue.

Cathay Pacific is Hong Kong’s flagship carrier and a global aviation leader.

The A&O cross-practice deal team is led by partner Lina Lee alongside corporate partner Jonathan Hsui and supported by corporate associate Shue Sing Churk. Partners Agnes Tsang and Jaclyn Yeap provided capital markets support. Partners Alex Stathopoulos and Kung-Wei Liu provided US securities law support, while partner Charlotte Robins and counsel Andre Da Roza provided regulatory input.

A&O advises PT Garuda Indonesia on the consent solicitation exercise

A&O has advised PT Garuda Indonesia (Persero) Tbk on a consent solicitation exercise on the restructuring of its outstanding USD500m sukuk in the international capital markets. The restructuring included a maturity extension and certain covenant holidays. This exercise was a market-first with respect to amending a sukuk structure that was based on rights to travel/available seat kilometres (ASKs) as the underlying Shariah-compliant assets. ASKs are an industry measure of an airline’s passenger capacity calculated on the number of seats available multiplied by the distance flown in kilometres. 

The A&O team was led by International Capital Markets partner Aloysius Tan and Felipe Duque in Singapore and Corporate partner Harun Reksodiputro in Jakarta with support from Andrew Mohammad, in Jakarta and Husayn Reza and Serena Upadhay in Singapore.

Chapter 11 cases

A&O is representing various lessors and finance parties in Chapter 11 cases for numerous airlines. Chapter 11 refers to Chapter 11 of the United States Bankruptcy Code which permits reorganisation of a debtor's business affairs, debts and assets.

More about Allen & Overy’s aviation expertise

Even before the pandemic, the aviation sector was facing a number of challenges. Increased competition, overcapacity, security concerns, climate-related pressures and rising fuel costs coupled with the increasing consolidation of airlines have had a profound impact on the industry.

A&O provides global coverage to the aviation industry advising across all legal disciplines including workouts and restructurings, mergers and acquisitions (public and private), funding (equity and debt), aircraft portfolio sales and purchases, engine financings, operating leases, privatisations, sales and leasebacks, major fleet purchases, export credit backed financings, mergers and acquisitions, cross-border tax and leveraged leases, receivables, funds and maintenance contracts.

The firm also has unrivalled credentials advising airports which are equally impacted by the pandemic. We work with every kind of market participant in the airport sector, including buyers, consortia, builders, financiers, governments and regulators on many of the largest airport transactions around the world.