Island Air ATR 72 - source Island Air.jpg Island Air

AAR Acquires Island Air's ATR 72 Spares and Tooling

The ATR inventory will be integrated into AAR’s existing ATR spares-inventory supply chain.

AAR announced on Oct. 23 that it has expanded its parts offerings for ATR turboprop regional airliners by purchasing the entire ATR spares inventory and tooling of Honolulu-based Island Air.

In September, Island Air phased out its ATR 72 fleet and two weeks ago the regional carrier filed for Chapter 11 bankruptcy protection.

The ATR inventory will be integrated into AAR’s existing ATR spares-inventory supply chain and strategically positioned at the company’s distribution hubs in the United States, Singapore and Hannover in Germany, the aftermarket provider says.

AAR says the Island Air spares and tooling holding it has purchased is the first ATR inventory package it has purchased since entering the ATR market earlier this year, when it bought ATR inventory from ASL Aviation subsidiary ACLAS Global as part of a power-by-the-hour agreement with ASL.

Wood Dale, Illinois-based MRO giant AAR Corporation has a dedicated ATR product-line team based in the UK to service ATR customer parts requirements globally. AAR employs more than 5,000 people in more than 20 countries.

“The acquisition of the Island Air inventory and tooling re-affirms our commitment to the ATR family, operators and MROs,” says Gordon Bilbey, general manager, ATR Parts Supply for AAR. “Through our dedicated UK ATR hub and AAR’s worldwide regional sales offices, we are committed to becoming the preferred choice for ATR aftermarket support.”

Island Air phased out its last ATR 72 on Sept. 5, leaving it at the time with a fleet of five 78-seat Bombardier Q400 regional turboprops to operate its inter-island route network within the island state of Hawaii.

Then Island Air filed for Chapter 11 bankruptcy protection on Oct. 16 to try to protect itself from threats from Dublin-based lessor Elix Aviation Capital to ground its remaining aircraft, which by that time consisted of three Q400s owned by an Elix subsidiary.

Elix served lease termination notices in respect the three aircraft on Island Air on Oct. 12, when (according to Island Air) the airline was in the process of renegotiating its aircraft leases with its lessors.

The airline is now operating using cash collateral, having been approved to do so by a bankruptcy judge until Nov. 8, the date of its final bankruptcy hearing. The judge ordered Island Air to present a budget by Oct. 27 in support of its final hearing.

However, on Oct. 25 Wells Fargo Bank Northwest, acting as the trustee for Elix Assets 8 Ltd,  the leasing vehicle owned by Oaktree Capital Management-backed Elix Aviation Capital which owns the three Q400s still being operated by Island Air, filed an appeal in a U.S. federal court to try to prevent Island Air from continuing to operate the three aircraft.

In its appeal, Wells Fargo said that as of October 25 Island Air owed Elix Assets 8 Ltd $4.58 million in rentals and maintenance-reserve payments.

Wells Fargo said in the appeal that Island Air had not paid rentals or maintenance reserves on the aircraft since July and claimed the values of the aircraft were depreciating on a daily basis as a result of “improper operation” of the Q400s by the Hawaii regional carrier.

Island Air operates about 200 flights a week linking Hawaii's four largest islands, Oahu, Maui, Hawai'i and Kaua'i and employs more than 400 people.

TAGS: Components
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