Avianca Holdings S.A. has filed for Chapter 11 Bankruptcy “to preserve and reorganise” its businesses as it continues to deal with the impact of the COVID-19 pandemic.
“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, we remain steadfast in our commitment to connecting people, families and businesses,” the airline said in a statement.
“Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic,” said Anko van der Werff, Chief Executive Officer of Avianca. “Despite the positive results yielded by our ‘Avianca 2021’ plan, we believe that, in the face of a complete grounding of our passenger fleet and a recovery that will be gradual, entering into this process is a necessary step to address our financial challenges.”
“When government-mandated air travel restrictions are lifted and we are able to gradually resume our passenger flights, we look forward to welcoming back our furloughed employees and playing a leading role in restarting the economy in Colombia and our other key markets. We greatly appreciate the dedication of our employees to Avianca and to serving the more than 30 million passengers that fly our airline each year. We remain committed to our purpose to connect people, families and businesses. Our customers can be confident that they can continue to depend on Avianca for safe, reliable and highquality service, and our valued LifeMiles members can expect to accrue and redeem miles as normal,” Van der Werff continued.
Van der Werff added: “We believe that a reorganisation under Chapter 11 is the best path forward to protect the essential air travel and air transport services that we provide across Colombia and other markets throughout Latin America. Avianca has operated for more than 100 years – only the second airline in the world to achieve this milestone. We are confident that through this process we can continue to execute our ‘Avianca 2021’ plan, optimise our capital structure and fleet of aircrafts and – with government support – emerge as a better, more efficient airline that operates for many more years.”
Through its Avianca 2021 plan, the company redesigned its network with 130 routes to 76 destinations in 27 countries, adding to the launch of a new pricing model ”branded fares” in domestic markets in Ecuador and Colombia, including flights to and from Europe. These initiatives, along with customer-centric programs, had resulted in improved operational indicators, with a passenger-itinerary-completion rate of 98.7% and a 6-point increase in customer satisfaction.
Of the total number of countries in which Avianca operates, 88% have total or partial passenger air transport restrictions, forcing the airline to take a series of extraordinary and structural measures.
In parallel to its Chapter 11 filing in the US, Avianca intends to commence a wind-down of its operations in Peru pursuant to local laws, to support essential right-sizing efforts and allow Avianca to renew its focus on core markets upon emergence from its court-supervised reorganisation
