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The situation of Avianca, in the midst of the paralysis of the tourism sector, led to the decision they finally made: they resort to the economic rescue law according to United States regulations, due to insolvency, which implies that the company is in a situation similar to the one she had when she was rescued by Germán Efromovich a few years ago.
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Technically, economic salvage implies that they file for Chapter 11 in New York (United States), which, according to the company, touches Avianca Holdings SA and some of its subsidiaries and affiliates.
The request was made this Sunday. It establishes that they request to receive “voluntarily to Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court of the Southern District of New York, in order to preserve and reorganize Avianca’s businesses.
LifeMiles, the company that administers the program of the same name, is NOT part of the Chapter 11 application, they said.
According to the arguments presented, “despite effective debt restructuring in 2019 and successful execution of its plan “Avianca 2021” through mid-March, the speed and dramatic escalation of the impact of the COVID-19 crisis have led the Company to file for Chapter 11 in New York, United States, “the company said.
90% decrease in global passenger traffic and reduction of industry revenues worldwide by $ 314 billion, which is expected worldwide
Avianca indicates that the pandemic has caused a 90% decrease in traffic global passenger and is expected to reduce industry revenue worldwide by $ 314 billion, according to the International Air Transport Association (IATA).
In the specific case of this company, Avianca’s regular passenger operations have been on the ground since mid-March, which has reduced its consolidated revenue by more than 80% and it has put significant pressure on its liquidity.
Thus, the process, supervised by the Court, is intended to favor the continuity of Avianca’s operations, preserve jobs, maintain connectivity for more than 30 million passengers annually of the Company and promote the economic recovery of Colombia and its other key markets, “they indicated.
Avianca’s regular passenger operations have been on the ground since mid-March, which has reduced its consolidated revenue by more than 80%
The company emphasized that it is committed to “continue serving its customers with safe and reliable air travel and high quality service, as the travel restrictions generated by COVID-19 are gradually lifted. “
In addition, they added that “the company continues its conversations with governments regarding financial support for the success of the process.”
News in development …
