Avianca airline files for bankruptcy
Avianca, another major international airline, has gone bust in the wake of the coronavirus pandemic. The carrier is the second-largest in Latin America, but its passenger operations have been grounded since March because of coronavirus.
On May 10, 2020, Avianca Holdings S.A. and certain of its subsidiaries and affiliates filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York to preserve and reorganize Avianca’s businesses as the Company continues to navigate the impact of the COVID-19 pandemic. The filing was necessitated by the unforeseeable impact of the COVID-19 pandemic, which has resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by $314 billion, according to the International Air Transport Association.
Avianca will continue to operate and serve our customers during this process. As the largest airline in Colombia and El Salvador and the second largest in Latin America, they remain steadfast in our commitment to connecting people, families and businesses. Throughout the court-supervised process, Avianca intends to:
- Protect and preserve operations so Avianca can continue to operate and serve customers with safe and reliable air travel and high-quality service, under the strictest biosafety protocols, as COVID-19 travel restrictions are gradually lifted;
- Ensure connectivity and drive investment and tourism by continuing as Colombia’s flagship airline, serving over 50% of the domestic market in Colombia and providing essential non-stop service across South America, North America and European markets as well as continuing cargo operations, playing a key role in the economic recovery of Colombia and the Company’s other core markets following the COVID-19 pandemic;
- Preserve jobs in Colombia and other markets where the Company operates, with Avianca directly responsible for more than 21,000 jobs throughout Latin America, including more than 14,000 in Colombia, and working with more than 3,000 vendors; and
- Restructure the Company’s balance sheet and obligations to enable Avianca to navigate the effects of the COVID-19 pandemic as well as comprehensively address liabilities, leases, aircraft orders and other commitments.
Avianca continues to be engaged in discussions with the government of Colombia, as well as those of its other key markets, regarding financing structures that would provide additional liquidity through the Chapter 11 process and play a vital role in ensuring that the Company emerges from its court-supervised reorganization as a highly competitive and successful carrier in the Americas.