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Avianca President Anko Wan der Werff explained that despite all the efforts the company has made in recent months and the results it has tried to achieve, the Covid-19 crisis, led them to make the decision to file for bankruptcy code 11 of the United States law.
He noted that his management team was analyzing all the alternatives and concluded that the best option was to avail himself of this law and ttry to come out stronger from the process, which according to Van der Werff has four objectives.
These are protecting operations to continue serving clients with measures that are lifting restrictions, playing a key role in Colombia’s economic recovery by promoting business and tourism travel. Also preserve more than 21,000 jobs in Colombia and the world and restructure the balance and operations of the company as well as manage its financial commitments.
The executive explained that this is not an insolvency or liquidation procedure and that the operations of Avianca will continue during and after Chapter 11. Faced with this, he said that the company faces an unprecedented challenge with the reduction of about 90% of air traffic and the drop in revenue while still having fixed expenses.
Why in the United States?
Avianca CFO Adrian Neuhauser explained that the United States legal system has the necessary tools to guarantee restructuring of large companies and recalled that the company already underwent that same procedure a few years ago.
He explained that it will serve to reorganize financial obligations and emerge as a stronger airline. In this sense, he said that they are taking the necessary measures to protect employees, customers and suppliers whom they fully intend to pay their debts.
What will happen to the employees?
The company clarified that the employment situation of Avianca Holdings employees does not change and that the intention is to protect each job that is necessary for the company, so the contracts will remain in force.
They also referred to those who have asked for unpaid leave, ensuring that these will continue during the month of May and will make new decisions in June.
What about customers who have tickets?
Avianca explained that they decided to extend the flexibility policy until October, which means that people who have tickets will be able to make changes without penalty.
They also enabled a voucher that can be redeemed until June 2021.
Van der Werff indicated that they are going to enable the website www.aviancaseguiravolando.com where they will report each step of the process and will publish any updates it may have.
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