Avianca Holdings, South America's second largest airline, filed for bankruptcy on Sunday as it struggles against the coronavirus pandemic. The carrier has not operated any of its regularly scheduled passenger services since mid-March.
Avianca Airbus A319-100 seen landing at Miami International Airport. Photo by Andrew Pries | AeroNewsX
The temporary suspension of its operation in mid-March resulted in an 80% decline in consolidated revenues and placed 'significant pressure on its cash reserves,' the airline said in a statement.
Anko van der Werff, Chief Executive Officer of Avianca, said: "Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic."
He continued: "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."
Avianca Airbus A330-200 registered PR-OCK. Photo by Matt Lino | AeroNewsX
Avianca says that, as it continues to seek financial aid from the government of Colombia and those of 'its other key markets', the Chapter 11 bankruptcy process would allow it to safeguard the 21,000 jobs it is directly responsible for. As it enters Chapter 11 bankruptcy, Avianca said it would also be downsizing its operations in Peru to 'renew its focus on core markets upon emergence from its court-supervised reorganization'.
"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," added Anko van der Werff.
The majority of Avianca's employees have gone without pay since the beginning of the crisis. Last year, Avianca launched its 'Avianca 2021' project which, the airline says, has so far improved operational indicators.
Avianca is the world's second oldest airline, behind KLM, having celebrated its 100 year anniversary back in December last year.