Avianca files for Chapter 11 to preserve and reorganise business

Columbian flag carrier Avianca has filed for Chapter 11 bankruptcy as the coronavirus (Covid-19) continues to affect operations.

The carrier, along with some of its subsidiaries and affiliates, filed voluntary petitions in the US Bankruptcy Court for the Southern District of New York.

One of the largest carriers in Latin America, Avianca grounded its passenger operations since March due to the outbreak. This has resulted in its consolidated revenue reduce by more than 80%.

LifeMiles, which is part of Avianca’s loyalty programme, is administered by a separate company and is not part of the Chapter 11 filing.

Avianca has more than 21,000 employees working throughout Latin America, including over 14,000 in Colombia, and 3,000 vendors.

Avianca chief executive officer Anko van der Werff said: “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.”

The company is expecting the court’s decision in the coming days.