Avianca Holdings has filed for Chapter 11 bankruptcy protection in New York. In its filing the Colombian flag carrier, the second largest airline in Latin America after LATAM, pointed to the impact of the coronavirus pandemic which forced the grounding of all its flights since mid-March.
Avianca serves over 50 percent of Colombia’s domestic market. The bankruptcy filing also affects 39 subsidiaries under the Avianca Holdings parent company, including Avianca Ecuador, Avianca Costa Rica, and Taca International Airlines.
The airline is the second world’s oldest airline after KLM, created in 1919, and is part of the StarAlliance group. LifeMiles, Avianca’s loyalty program, is administered by a standalone company and is not part of the Chapter 11 filing.
The airline is using the social media tag, #WillKeepOnFlying to stress that the “reorganization” is voluntary and will lead to a viable airline going forward.
In a press statement, Avianca said that the Chapter 11 filing would allow the airline to “protect and preserve operations; ensure connectivity and drive investment and tourism; preserve jobs and restructure the Company’s balance sheet.”
Part of the process for Avianca will entail shutting down service to Peru to concentrate on more robust routes. The airline will also be seeking financial support from countries where it operates.
Mark Chestnut, editor and founder of LatinFlyer.com told Business Traveler USA that if the airline shutters it will create severe lack of competition on many routes.
“Business and leisure travelers would likely find higher fares and fewer choices on many international routes,” he said.
Chestnut said that Avianca was the last airline he flew before the pandemic shutdown. “I flew Avianca from Bogota to JFK on March 15,” he said. “Personally, I like them. They have newer aircraft and good service on board. I hope they survive.”