Avianca Holdings and some of its subsidiaries voluntarily join the Capíleakage 11 of CóI say Bankruptcy USA in order to maintain the operationón.
Taking advantage of this process was necessary due to the unforeseeable impact of the pandemic COVID-19, which has caused a decreaseón of the 90% of the tráglobal passenger demand and is expected to reduce industry revenues worldwide by 314.000 one billion dóhomes, themselvesúin the Associationóno. of Transport AéInternational prisoner (THERE IT IS). Avianca's regular passenger operations have been grounded since mid-March, which has reduced its consolidated income by más of a 80% and has exerted pressureón significant on its liquidity.
A través del proceso de reorganizationón of the Capeíleakage 11, Avianca has the intentionón of:
- Protect and preserve operations to continue serving customers with trips toésafe and reliable inmates, under the más strict biosafety protocols, as COVID-19 travel restrictions are gradually lifted;
- Ensure connectivity and boost investmentón and tourism by continuing as the main airlineíColombia line, providing services to meás of the 50% of the internal market in the país and an essential non-stop service throughés of Américh from the South, Américh North and European markets; así how to continue loading operations, performanceñI play a key role in the recoveryón económica from Colombia and the othersás main markets of the Companyñíundressingés of the COVID-19 pandemic;
- Preserve jobs in Colombia and other markets in which the Company operatesñía, Avianca being directly responsible for más de 21.000 direct and indirect jobs throughout Américh latina, including más de 14.000 In colombia, and working with meás de 3.000 providers.
- Restructure the company's balance sheet and obligations to face the effects of the COVID-19 pandemic, así how to manage your responsibilities, leases, aircraft orders and other commitments.
«The effects of the COVID-19 pandemic have led us to face the crisis más challenging of ours 100 añhistory ones as compañía» I knowñaló Anko van der Werff, CEO and President of Avianca Holdings. «Despite the positive results of our plan «Avianca 2021″, we believe that, before you suspend itón total de nuestra operationón of passengers and a recoveryón what to beá gradual, Entering this process is a necessary step to face our financial challenges».
Avianca - like many other líneas aéareas around the world, including those of the United States, the Unitedón European and Asian, así like those of Américh latina- Eastá seeking financial support from country governmentsíses in which it provides essential services. The Companyñícontinues to participate in conversations with the Government of Colombia, así as with the governments of its other key markets, in order to find financing structuresón that provide additional liquidity within the framework of the Capeíleakage 11 and what performanceñstill play a vital role in ensuring the company emerges from its reorganization.ón like an aerosolíhighly competitive and successful company in the Américh. While these conversations are taking place, Avianca has the intentionón to use its liquidity together with the funds generated by its ongoing operations (like cargo transportation), to support the business during the reorganization processón.
Measures to protect employees and suppliers
As part of the process, Avianca has submitted several requests to the Court for support of its reorganization.ón and the Companyñíwaiting for the court to decide on these petitions in the próximos días. The Holding has requested authorizationón to fulfill work commitments prior to the application, así how to maintain the compensation schemeón applicable to your employees. Avianca tooén ha requested authorizationón to comply with various pre-filing obligationsón of the application that are owed to some of its travel agency partners and their suppliers from before the submission dateón. The Company has the intentionón to pay suppliers and travel agency partners according toún sus pránormal tactics, in a timely manner for the goods and services provided from the date of presentation.ón and during the process of Capíleakage 11.
Continue to provide services to customers
Avianca tooén has submitted requests to maintain its customer programs throughout this process; therefore, passengers can trust in continuing to organize trips and fly with Avianca in the same way that they have always done.. in addition, customers can use the tickets, vouchers and gift vouchers purchased before Avianca started this process. further, Continueán accumulating miles when they fly with the airlineínea, and canán continue redeeming the miles accumulated throughés from LifeMiles™ to buy tickets with Avianca during this process. Así same, additional frequent flyer benefits remain active, including access to VIP rooms, priority check-in, cabin upgrades and others. Avianca tooén expects to continue issuing ticket refunds and honor travel vouchers and payments or crédata associated with baggage claims or services in accordance with their policiesícurrent ethics. Given the impact that COVID-19 has had on travel plans, Avianca continueá implementing your políethics of flexibility when changing tickets until the 31 October of 2020.
In the same way, as soon as travel restrictions are lifted, the airínea plans to resume its flights under the más strict biosafety protocols.
“Avianca 2021” Plan and impact of COVID-19
The Añor past, Avianca launchedó with ésuccess the plan «Avianca 2021», and throughout the 2019 and in the first two months of 2020, the companyñía habíhas achieved important positive results in this plan. Through this strategy, the companyñía radishñó your network with 130 routes to 76 destinations in 27 países, sumáleading up to the launch of a new rate model «Fly to your measure» in the national markets of Ecuador and Colombia, including flights to and from Europe. These initiatives, along with customer-focused programs, led to an improvement in operating indicators, with an itinerary completion rate of 98,7% and an increase of 6 points in satisfactionócustomer number.
according to plan, at the beginning of 2020 the companyñía concluyó with ésuccessful extrajudicial reprofiling of its financial debt and lease obligations and collectionó 375 millions of dólares of new financingón.
Nevertheless, like other aerosolílines of the world, Avianca's operations have seen dramaticáethically affected by the COVID-19 pandemic and the resulting online travel restrictionsía aéareas imposed by governments, while the Companyñístill has high fixed costs. Of the total países in which Avianca operates, the 88% has total or partial transportation restrictionsépassenger prisoner, what has forced the airlineíto adopt a series of extraordinary and structural measures. These have included unpaid leave for employees, temporary salary reductions, reductions in non-essential capital expenditures and deferrals of long-term lease payments. Avianca cannot predictánot getting upán the current travel restrictions and once this happens, does not expect revenue to return to pre-pandemic levels anytime soon. These factors, added to the important financial obligations of Avianca, made it necessary for the Holding to explore alternatives to reorganize its operations and restructure its debt.
Operations in Peruú
In parallel to the decisionón to benefit from the Capíleakage 11, Avianca has the intentionón to start a reductionón of its operations in Peruú in accordance with local laws. This I decidedón supports right-sizing effortsñor and allowá Avianca to focus on its main markets as it emerges from its reorganizationón supervised by the courts.
Capíleakage 11 – Process and Advisors
The process of Capíleakage 11 It is a legal procedure established in the United States of America.érich that is recognized by others países of the world. It is a temporary process, in accordance with the legislationón de ese país, allows a company to reorganize and complete a restructuringón financial under the supervisionón of the United States judicial system, while continuingúto its operations under the leadership of its Board of Directors and management team. Several companies, including many aerosolídenies, have used the Cap processíleakage 11 to reorganize their financial obligations and emerge as m organizationsás strong. Even Avianca welcomedó on 2003 to a process of Capíleakage 11 that allowed himó fortalecerse para su posterior expansionón and Américh latina.
additional resources
Additional resources can be accessed for customers and other stakeholders, así like other informationón about Avianca presentations, visiting the Reorganization websiteócompany number at www.aviancaseguraavolando.com. Court files and other documents related to the Cap processíleakage 11 in the United States isán available on a separate website managed by the Avianca claims agent, Kurtzman Carson Consultants, on www.kccllc.net/avianca. La informationón también isá available by calling (866) 967-1780 (EE. UU. / Canadaá) o al +1 (310) 7512680 (international), así as by emailóunique to www.kccllc.net/avianca/inquiry.
It is bankruptcy but in a process only valid in the USA that upon presentation of a restructuring plan approved by a federal judge allows you to continue operating but without free disposal of income that will be attached to the plan and payments will be proportional and aimed at resolving your economic situation if they don't make it they will close it is a special figure
What a pity, It was the only airline that entered La Paz BOLIVIA with a single stopover and allowed two suitcases, the
service was very good
and will continue to fly.