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Avianca, Latin American’s Second Largest Airline, Files For Chapter 11 Bankruptcy Protection

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Avianca B787 Right Side View
Avianca, together with its subsidiaries and affiliated companies has filed a voluntary petition today under Chapter 11 of the United States Bankruptcy Law to seek protection and reorganization to Avianca ’s business. The pandemic caused a 90% drop in global passenger traffic and is expected to reduce global aviation industry revenue by $ 314 billion. Avianca ’s loyalty program LifeMiles ™ is managed by another company and is not part of the submission in Chapter 11. The Chapter 11 process is a well-established legal process in the United States of America that is recognized by other countries around the world. The process is a temporary one that, according to U.S. law, allows a company to reorganize and complete a financial restructuring under the supervision of the U.S. court system, while continuing its operations under the oversight of its board of directors and management team.
Avianca ATR-72
Avianca ATR-72

According to the International Air Transport Association, the COVID-19 pandemic has unforeseen effects, so it is necessary for Avianca to submit this document. Since mid-March, Avianca ’s scheduled passenger business has been grounded, which has reduced its consolidated revenue by more than 80% and has put tremendous pressure on cash reserves.

Avianca A320 Takeoff
Avianca A320 Takeoff

Through this reorganisation process, Avianca stated in a press release that it intends to:

  • Protect and preserve operations so Avianca can continue to operate and serve customers with safe and reliable air travel, under the strictest biosafety protocols, as COVID-19 travel restrictions are gradually lifted; 
  • Ensure connectivity and drive investment and tourism by continuing as Colombia’s flagship airline, serving over 50% of the domestic market in Colombia and providing essential non-stop service across South America, North America and European markets as well as continuing cargo operations, playing a key role in the economic recovery of Colombia and the Company’s other core markets following the COVID-19 pandemic; 
  • Preserve jobs in Colombia and other markets where the Company operates, with Avianca directly responsible for more than 21,000 jobs throughout Latin America, including more than 14,000 in Colombia, and working with more than 3,000 vendors; and 
  • Restructure the Company’s balance sheet and obligations to enable Avianca to navigate the effects of the COVID-19 pandemic as well as comprehensively address liabilities, leases, aircraft orders and other commitments.

“Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic,” said Anko van der Werff, Chief Executive Officer of Avianca. “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. Our customers can be confident that they can continue to depend on Avianca for safe, reliable and high-quality service, and our valued LifeMiles™ members can expect to accrue and redeem miles as normal, ”

Mr. Van der Werff

Avianca Airlines is seeking financial support from governments that provide basic essential services just like many other airlines in the world right now. Avianca continues discussions with the Colombian government as well as those from its ket markets, discussing that the financing structure will provide more liquidity through the Chapter 11 process and play an important role in ensuring that the company stands out from the courts-supervising restructuring, and continue to be a competitive and successful carrier in Americas. During the interim period, the company intends to use the cash on hand and capital generated from its ongoing business such as cargo to support the business during the court-supervised reorganization process.

Avianca A330-f Cargo
Avianca A330-F Cargo

“We believe that a reorganization under Chapter 11 is the best path forward to protect the essential air travel and air transport services that we provide across Colombia and other markets throughout Latin America. Avianca has operated for more than 100 years – only the second airline in the world to achieve this milestone. We are confident that through this process we can continue to execute our ‘Avianca 2021’ plan, optimize our capital structure and fleet of aircraft and – with government support – emerge as a better, more efficient airline that operates for many more years.”

Mr. Van der Wilf

Avianca has presented various motions in court to request authority to introduce measures in protecting its employees and suppliers, Avianca is also planning to maintain its network and customer programs throughout this process and customers can expect to continue to arrange travel and fly with Avianca in the same way they always have. Avianca also expects to continue to issue ticket refunds and honour travel coupons and payments or credits associated with baggage or service claims in adherence with its current policies. Given the impact COVID-19 has had on travel plans, Avianca will continue to waive change fees and other penalties associated with changes to customers’ travel plans for tickets purchased until October 31, 2020. When COVID-19 travel restrictions are lifted, Avianca plans to resume passenger flights with the strictest biosafety protocols.

Avianca B787
Avianca B787

1 Comment

1 Comment

  1. BRASILIAN GOD

    May 11, 2020 at 9:17 am

    COVID-19 takes another one down

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Route Network

SAS Launches Transfer Testing Solutions At Copenhagen Airport

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SAS A350 Livery Rear View


The Chinese government recently issued new regulations that all passengers on flights to China need to undergo nucleic acid and serum IgM antibody tests in advance. The testing equipment at Copenhagen Airport will be put into use from November 16. Transit passengers need to set aside 4 hours for testing and obtain testing reports. This time is expected to be shortened to 1 hour after 2-3 weeks. Passengers who have undergone pre-boarding double-checks on flights to China at Copenhagen Airport can board directly with the negative test report. Scandinavian Airlines will continue to provide passengers with the latest news about the Copenhagen Airport testing facilities.


More flexible rebooking and cancellation for flights connecting to China

According to the new regulations, transit passengers need to undergo nucleic acid testing and serum IgM antibody testing in countries that fly directly to China, which may require extending their stay in Copenhagen, and thus need to rebook or cancel the original flight to Copenhagen. In order to facilitate passengers to accept the test on time, SAS is allowing passengers to rebook or cancel the flight to Copenhagen for free. The resulting change fee, refund fee and possible fare difference will be all exempted, that is to say, all are free. Normally, European inland segments are not allowed to be changed or cancelled individually. Please note that SAS is not responsible for other expenses incurred due to rescheduling, such as accommodation. There is no refund for cancelled connecting flights.

Extra Check-in Baggage For Students Fly From China

Scandinavian Airlines are now launching very attractive one-way tickets from China. All students departing from China who purchase SAS flight tickets in economy class only need to show a valid student ID at the airport check-in counter to check in one extra piece of luggage. This means that students travelling in economy class (except for Go Light) can carry two pieces of checked luggage, each of which must not exceed 23 kg. The free extra baggage check will be done manually at the airport check-in counter.

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