Colombian airline Avianca has submitted for Chapter eleven personal bankruptcy in the U.S. Southern District of New York citing a drop of much more than eighty% in consolidated profits as flights remain grounded because of to the COVID-19 pandemic.
In a assertion, the company reported it would use the personal bankruptcy to stability its sheet obligations to navigate the effects of COVID-19 and to deal with liabilities, leases, aircraft orders, and other commitments. The company also reported it intends to wind-down its operations in Peru.
In a analysis report, analysts at the Centre for Aviation reported Avianca was in a “period of upheaval” even before the global health and fitness crisis. In April 2019, CEO Hernan Rincon Lema introduced he was leaving the company after a few a long time in the job.
The company also noticed a collection of destructive credit scores and a unexpected change in board regulate. Final 12 months, the company introduced the “Avianca 2021” plan less than which it reprofiled its financial debt and lease obligations. It also lifted $375 million in new funding.
“Avianca is facing the most demanding crisis in our a hundred-12 months background as we navigate the effects of the COVID-19 pandemic,” chief government officer Anko van der Werff reported. “Despite the favourable benefits yielded by our Avianca 2021 plan, we consider that, in the encounter of a full grounding of our passenger fleet and a recovery that will be gradual, entering into this procedure is a needed step to deal with our fiscal challenges.”
Avianca reported it has “limited visibility” on when vacation limits would be lifted and it anticipated the effects of the pandemic on vacation to be prolonged-lasting.
Avianca, launched in 1919, was the 3rd-largest airline in Latin The us based on marketplace share at the close of very last 12 months, according to Euromonitor.
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