Colombian airline Avianca has submitted for Chapter eleven personal bankruptcy in the U.S. Southern District of New York citing a fall of more than eighty{312eb768b2a7ccb699e02fa64aff7eccd2b9f51f6a579147b7ed58dbcded82a2} in consolidated revenue as flights keep on being grounded thanks to the COVID-19 pandemic.

In a assertion, the enterprise mentioned it would use the personal bankruptcy to balance its sheet obligations to navigate the consequences of COVID-19 and to tackle liabilities, leases, aircraft orders, and other commitments. The enterprise also mentioned it intends to wind-down its operations in Peru.

In a investigation report, analysts at the Centre for Aviation mentioned Avianca was in a “period of upheaval” even in advance of the international wellness disaster. In April 2019, CEO Hernan Rincon Lema introduced he was leaving the enterprise after 3 several years in the part.

The enterprise also saw a sequence of unfavorable credit score scores and a sudden adjust in board command. Previous calendar year, the enterprise introduced the “Avianca 2021” plan below which it reprofiled its debt and lease obligations. It also raised $375 million in new funding.

“Avianca is struggling with the most demanding disaster in our one hundred-calendar year historical past as we navigate the consequences of the COVID-19 pandemic,” chief executive officer Anko van der Werff mentioned. “Despite the favourable results yielded by our Avianca 2021 plan, we imagine that, in the confront of a total grounding of our passenger fleet and a recovery that will be gradual, coming into into this system is a vital action to tackle our monetary difficulties.”

Avianca mentioned it has “limited visibility” on when vacation restrictions would be lifted and it envisioned the consequences of the pandemic on vacation to be lengthy-long lasting.

Avianca, founded in 1919, was the third-largest airline in Latin The united states dependent on current market share at the stop of very last calendar year, in accordance to Euromonitor.

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Avianca, COVID-19