Avianca, one of Latin America's largest airlines, files for bankruptcy
AviancaHoldings filed for bankruptcyon Sunday as the airlineindustry continues to take a hit under coronavirustravel restrictions.
- In a statement on Sunday, the Colombian flagship carrier said that it filed for Chapter 11 bankruptcy protection in a court in New York.
- The company said the filing was spurred by the
COVID-19pandemic, which grounded Avianca's flight operations since mid-March and has reduced the company's income by over 80%.
- If the company fails to rebound after filing for bankruptcy, it would be the first major airline to shut down as a result of the coronavirus pandemic.
- Visit Business Insider's homepage for more stories.
Avianca Holdings filed for bankruptcy on Sunday as the airline industry continues to take a hit under coronavirus travel restrictions.
The novel coronavirus has led countries around the world to impose strict travel restrictions, causing demand for air travel to plummet. Several airlines around the world have faced new financial hardships, with some collapsing under the pressure.
In a statement on Sunday, the Colombian flagship carrier said that it filed for Chapter 11 bankruptcy protection in a court in New York.
"Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic," Anko van der Werff, Chief Executive Officer of Avianca, said in the statement.
The company said the filing was spurred by the COVID-19 pandemic, which grounded Avianca's flight operations since mid-March and has reduced the company's income by over 80%. In filing for bankruptcy, the airline hopes to continue operations as COVID-19 restrictions are gradually lifted.
The airline — the second-largest in Latin America — says it is responsible for more than 21,000 jobs throughout the region, including more than 14,000 in Colombia. According to Reuters, the airline failed to meet a bond payment deadline, adding pressure to its already thin bottom line.
The airline, which has a fleet of 158 aircraft across 27 countries, said it is still seeking government bailout money.
"Avianca continues to be engaged in discussions with the government of Colombia, as well as those of its other key markets, regarding financing structures that would provide additional liquidity through the Chapter 11 process," the statement said.
If the company fails to rebound after filing for bankruptcy, it would be the first major airline to shut down as a result of the coronavirus pandemic.
The airline filed for bankruptcy in 2003 and underwent a major reorganization process after it was bought out by Bolivian-born entrepreneur German Efromovich, who still owns a majority stake in the carrier.
According to Reuters, Avianca had $7.3 billion in debts in 2019.
Aviation experts previously warned that many of the world's airlines could be bankrupt by May because of the coronavirus pandemic.Read the original article on Business Insider
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