Avianca has filed for Chapter 11 bankruptcy.

Avianca and some of its subsidiaries and affiliates today requested to voluntarily file for 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 the business of this airline.

According to Avianca, accepting this process “was necessary”, due to the unpredictable impact of the covid-19 pandemic, which has caused a 90% decrease in world passenger traffic and which is expected to reduce industry revenues worldwide at $ 314 billion, according to the International Air Transport Association (IATA). Avianca’s regular passenger operations have been on the ground since mid-March, which has reduced its consolidated revenue by more than 80% and has put significant pressure on its liquidity.

Today we have announced our voluntary intention to reorganize in the United States of America to preserve and strengthen our businesses for the future. To learn more: https://t.co/2DVXVvsP0w. Avianca # Will continue to fly pic.twitter.com/NSHMrdVTSH

– Avianca (@Avianca) May 10, 2020

Through the Chapter 11 reorganization process, Avianca assured that it intends to protect and preserve operations to continue serving clients with safe and reliable air travel, under the strictest biosecurity protocols, as the requirements are gradually lifted. travel restrictions generated by the covid-19.

Also, the airline is committed to ensuring connectivity and boosting investment and tourism by continuing “as the main airline in Colombia”, providing services to more than 50% of the domestic market in the country and an essential service without stops through South America, North America and the European markets; as well as continue with cargo operations, playing a key role in the economic recovery of Colombia and the other main markets of the Company after the covid-19 pandemic.

Likewise, Avianca reported that it is committed to preserving jobs in Colombia and other markets in which the company operates, with the airline being directly responsible for more than 21,000 direct and indirect jobs throughout

Latin America, including more than 14,000 in Colombia, and working with more than 3,000 suppliers.

Similarly, Avianca indicated that another of the steps to be followed will be to restructure the company’s balance sheet and obligations to face the effects of the covid-19 pandemic, as well as manage its responsibilities, leases, aircraft orders and others. commitments.

“The effects of the covid-19 pandemic have led us to face the most challenging crisis in our 100-year history as a company,” said Anko van der Werff, CEO and President of Avianca. “Despite the positive results of our ‘Avianca 2021’ plan, we believe that, given the total suspension of our passenger operation and a recovery that will be gradual, entering this process is a necessary step to face our financial challenges” he added.

Avianca – like many other airlines around the world, including those of the United States, the European Union and Asia, as well as those of Latin America – is seeking financial support from the governments of the countries in which it provides essential services.

The company continues to engage in discussions with the Government of Colombia, as well as the governments of its other key markets, in order to find financing structures that provide them with additional liquidity under Chapter 11 and that play a vital role in ensuring that the company emerge from its reorganization as a “highly competitive and successful airline in the Americas”.

While these conversations are taking place, Avianca indicated that it intends to use its liquidity together with the funds generated by its ongoing operations (such as cargo transportation), to support the business during the reorganization process.

“When the restrictions imposed by governments for air travel are lifted and we can gradually resume our passenger flights, we hope to contribute to the revival of the economy in Colombia and in our other key markets and to reincorporate our employees,” said van der Werff.