As lessors plead their cases in local bankruptcy court to repossess their aircraft from Brazil’s fourth largest carrier Avianca Brazil, Air Lease says the carrier was never a desirable counterparty for the lessor.

“We felt they didn’t have the competitive cost position and market penetration to be eligible for our products,” executive chairman Steven Udvar-Hazy told investors during the JP Morgan aviation, transportation and industrials conference today. “It was a corporate decision not to do business with them,” he adds.

In December, Avianca Brazil filed for bankruptcy protection with the local courts as lessors moved to repossess their equipment. Aircastle, Aviation Capital Group and GECAS are among its major creditors and each has publicly stated their intentions to repossess their aircraft.

Udvar-Hazy notes that the airline’s founder German Efromovich courted the Los Angeles-based lessor to do deals with the Brazilian carrier, adding that “it was an unsuccessful romance”. “We purposefully avoided that situation,” Udvar-Hazy says.

Air Lease has no exposure to Avianca Brazil. The company leases only one 2009-vintage Airbus A330-200 (MSN 1016) to sister airline Avianca in Colombia. When the lease expires later this year, it is contracted to be released to “a large airline in Europe”, Udvar-Hazy says.

The Air Lease chairman notes that Brazil has demonstrated that it does not have room for more than three airlines to operate successfully. “We didn’t feel that the lowest guy on the food chain…had the capability to compete with Gol, TAM [sic] and Azul.”

When pressed by the moderator to comment on the Cape Town Convention’s efficacy, Udvar-Hazy replies: “Cape Town, to us, is a nice seaside town in South Africa.”

Later in the day, Aircastle’s executive vice president of corporate finance and strategy Roy Chandran told investors that it would be harmful for Brazil not to rule in favour of the lessors.

“Ultimately, the courts should prevail and they should adhere to what the convention says because it has broader implications to the rest of the Brazilian aviation industry,” says Chandran.

Aircastle has two 2014-build Airbus A320s and eight 2015-build of the same type on lease to the carrier. It was able to repossess one A330 it had on lease to the carrier prior to the filing for bankruptcy protection.