Colombian carrier returns planes to Morgan Stanley

Bankrupt Colombian national airline Avianca will return 13 aircraft to
leasing companies, including two Boeing 767s and three MD-80s to Morgan
Stanley (MWD) unit Ansett, according to a research report from Sanford
Bernstein. The report said Morgan should be able to re-lease the 767's at a
lower rate than it got from Avianca, leading to a $1.75 million per year
hit
to revenues. It said the MD-80s would likely be mothballed and written off
to the tune of $10.7 million. That would cut Morgan Stanley's 2003
per-share
earnings by about 1 percent, Bernstein said. The analyst concluded, "The
Avianca bankruptcy itself is a relatively small event for Morgan Stanley.

However, it does illustrate the real and worsening problems facing the
airline industry and the impact of the decline in the airlines' financial
strength."