The Wall Street Journal: Colombian airline Avianca files for Chapter 11 bankruptcy
The Wall Street Journal
Latin America’s second-largest airline has been hit hard by coronavirus cancellations
Colombian airline Avianca Holdings SA filed for bankruptcy protection in the U.S. as travel restrictions curtail flights and the company vies for public assistance from the Colombian and other governments to endure the coronavirus pandemic.
The company sought Chapter 11 protection in U.S. Bankruptcy Court in New York on Sunday, saying the filing “was necessitated by the unforeseeable impact of the COVID-19 pandemic” and the grounding of Avianca’s passenger operations since mid-March.
Latin America’s second-largest airline, Avianca
said it would restructure its roughly $5.3 billion in debt and lease obligations while positioning itself to begin resuming operations as government-imposed travel restrictions related to the coronavirus are gradually eased.
Airlines around the world are negotiating for government rescue packages as they quickly deplete their cash reserves. Avianca Chief Executive Anko van der Werff said Sunday the company is in discussions for public financing in key Latin American markets where it runs flights, including Colombia, to generate liquidity and stay afloat during the chapter 11 process.
In the interim, Avianca said it would cover expenses with cash on hand and revenue generated from ongoing cargo operations. Van der Werff said he didn’t expect Avianca’s flight volumes to recover “anywhere close” to its pre-coronavirus levels for 12 to 18 months.
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