newstodate.aero

Aug 14, 2020 (newstodate): Cabo Verde Airlines has certainly not developed into a profitable project for the Icelandair Group.
   As reported by a Cabo Verde news agency, the airline's CEO Erlendur Svavarsson writes that there is still "no agreement" between Loftleidir Cabo Verde and the State on the company's future financing.
   -Our deepest hope is that all parties will reach an agreement in the coming weeks, he writes.
   Already before the Covid-19 outbreak, the airline was in dire financial straits that were further aggravated earlier this year when the state was forced to step in to secure salaries for employees.
    Three of four Boeing 757-200 aircraft in the fleet of Cabo Verde Airlines have been moved to Miami, USA, for preservation, and Cabo Verde Airlines claims that the aircraft are better and more safely stored at an aircraft maintenance and storage facility in Opa Locka, Miami, than in the humid climate reigning in Cabo Verde at this time of the year.
   The aircraft have been grounded as all flights in Cabo Verde have been suspended since April 19, 2020, and there is still no indication of when the curfew may be lifted.
   In 2017, Loftleidir Icelandic,  Cabo Verde Airlines and the Government of Cabo Verde inked a management agreement on the restructuring of the loss-making TACV Cabo Verde Airlines, and in March 2019, Loftleidir Cabo Verde, owned 70 percent by Loftleidir Icelandic ehf, and 30 percent by Icelandic investors, acquired 51 percent of Cabo Verde Airlines.  
   Plans for Loftleidir Cabo Verde to take over the next tranche of 39 of the 49 percent still held by the Cabo Verde state were aborted in April 2020 due to the uncertainties around the airline's future in the current coronavirus situation.  
   However, the Icelandair Group seems to be basically unconcerned about its investments in the Cabo Verde project, according to this note in the Group's H1/2020 Interim Financial Statement:
   -The book value of the Group's share in Cabo Verde Airlines has been fully expensed. Reserves have been made against all receivables on TACV and therefore, the Group has no further exposure on TACV.  
   -Negative developments in TACV operations might impact future operations of Loftleidir Icelandic due to leased aircraft.