Avianca Holdings Files for Bankruptcy Reorganization Because of Covid-19

RIO DE JANEIRO, BRAZIL – The parent company of the second biggest airline in Latin America, said in a statement that this decision was also made in light of the industry’s projected worldwide revenue reduction of US$314 billion, according to the International Air Transport Association (IATA).

As such, Avianca Holdings will voluntarily file for reorganization proceedings under Chapter 11 of the US Bankruptcy Code in the Southern District of New York Bankruptcy Court with the aim of “preserving operations to continue to serve customers by providing safe and reliable air travel, under the strictest biosecurity protocols, as COVID-19-generated travel restrictions are gradually lifted”.

In addition, it stressed that it aims to ensure connectivity and boost investment and tourism by remaining Colombia’s leading airline, providing service to over 50 percent of the country’s domestic market and essential non-stop service throughout South America, North America and European markets; as well as continuing cargo operations, playing a key role in the economic rebound of Colombia and the company’s other major markets after the COVID-19 pandemic.

It further noted that with this decision it also seeks to preserve jobs in Colombia and other markets in which it operates, being directly responsible for more than 21,000 direct and indirect jobs throughout Latin America, including more than 14,000 in Colombia, and working with over 3,000 suppliers.

Avianca Brasil, the branch of the airline servicing Brazil, had already filed for judicial reorganization in December 2018.

Source: Pulzo