Avianca Holdings has filed for bankruptcy, in this the airline hopes to restructure their assets and preserve the company.

The airline has filed for Chapter 11 Bankruptcy Protection in the Southern District of New York Bankruptcy Court.

The bankruptcy came just days ahead of looming government bond payments. All of the airline’s attempts at securing Colombian Government aid have been unsuccessful.

Avianca, the second-largest carrier in Latin America, has been grounded since March. Reuters has reported that the vast majority of the airline’s 20,000 employees have been on leave without pay.

Avianca B787 Business Class

Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic…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.

Anko van der Werff, CEO, Avianca

Avianca has $4.9 billion in debt, an increase of 20% since 2018, according to Reuters. Accounting firm KPMG, which manages Avianca’s finances, has expressed doubts about the airline’s future in recent weeks.

Avianca Will Continue to Operate

Avianca will continue to operate through this process and they will continue to fly once COVID-19 travel restrictions are gradually lifted. The airline’s main hubs in Colombia and Peru are currently closed to commercial traffic.

The LifeMiles program is administered by a separate company and is NOT part of Avianca’s Chapter 11 filing.

Sam Chui previously flew on Avianca B787-8 between Madrid and Bogota.

Article Sources: Reuters and FlightGlobal.

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