Colombia’s national airline, Avianca, has filed for bankruptcy security in a US court docket.
The provider is the 2nd-greatest in Latin America, but its passenger operations have been grounded given that March simply because of coronavirus.
It reported the pandemic had minimize a lot more than 80% of its earnings, and it was having difficulties with higher mounted fees.
If it fails to occur out of bankruptcy, Avianca will be the 1st main airline to go below amid the pandemic.
In a statement, the agency explained it experienced filed for Chapter 11 bankruptcy security in a court docket in New York. The method postpones a US firm’s obligations to its collectors, supplying it time to reorganise its money owed or offer sections of the organization.
Chief executive Anko van der Werff stated the transfer was essential to assure the New York-stated airline emerge as a “improved, additional economical airline that operates for a lot of additional many years”.
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Far more than 140 of its aircraft have been grounded because Colombian President Ivan Duque shut the country’s airspace in March. Most of its 20,000 staff members have been place on unpaid depart.
Behind KLM, Avianca is the next-longest continually running airline in the earth.
It beforehand filed for bankruptcy in the early 2000s, and was rescued by a offer with Bolivian oil businessman German Efromovich. The airline grew promptly beneath his stewardship, but its escalating financial debt led to a successful boardroom coup against Mr Efromovich previous 12 months. It is now run by Kingsland Holdings.
The coronavirus pandemic has dealt a huge blow to the intercontinental aviation industry, as governments impose vacation limitations and confinement actions.
World wide air travel has fallen by 90%, according to the International Air Transportation Association. The physique predicts Latin American airways will get rid of $15bn (£12bn €13.9) in revenues this 12 months – the most significant fall in the industry’s history.