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Avianca Holdings SA and some of its subsidiaries applied to file for Chapter 11 Bankruptcy Code of the United States in the Southern District Court of New York “in order to preserve and reorganize the business” of the company due to the impact of the coronavirus crisis on its liquidity.
“Taking advantage of this process was necessary due to the unpredictable impact of the COVID-19 pandemic, which has caused a 90% decrease in global passenger traffic and is expected to reduce the industry’s income worldwide by 314,000 billion Dollars (…) Avianca’s regular passenger operations have been on the ground since mid-March, which has reduced its consolidated income by more than 80%, “Avianca said in a statement.
Avianca filed several applications with the United States Court. The airline requested, among other things, authorization to fulfill work commitments prior to the request, as well as fulfill obligations that are owed to some of its travel agency partners and suppliers.
What about tickets and contracted flights?
Avianca indicated that “is committed to continuing to serve its customers with safe and reliable air travel and with a high quality service, as the travel restrictions generated by COVID19 are gradually lifted ”regardless of the administrative process involved in the voluntary reorganization (bankruptcy) process.
This means that as the restrictions against the coronavirus are lifted, the airline will resume operations. “Our clients can be sure that they will continue to count on Avianca for a safe service, reliable and high quality, and our valued LifeMiles members will continue to earn and redeem their miles just as they always have. ” said Anko van der Werff, president of Avianca.
Avianca maintains its services
The airline ensures that it will continue to provide its services during the process. “Passengers can trust to continue organizing trips and flying with Avianca the same way they always have (…) They can use the tickets, vouchers and gift vouchers purchased before Avianca started this process ”.
Likewise, it indicates that they will maintain the benefits of their frequent clients and partners of the LifeMiles program. “Including access to VIP Lounges, priority check-in, cabin upgrades and others. Avianca also expects to continue issuing ticket refunds and honoring travel bonuses and payments or credits associated with baggage or service claims in accordance with its current policies, ”he adds.
Avianca reiterates that will continue to apply its ticket change policy until on October 31, 2020 on flights affected by the suspension of activities due to the coronavirus.
What is Chapter 11 Bankruptcy Code?
It is a legal procedure established in the United States and recognized by other countries in the world. It is a temporary process that allows a company to reorganize and complete a financial restructuring under the supervision of the United States judicial system, while continuing its operations under the administration of its Board of Directors and management team. “Avianca went through a Chapter 11 process in 2003 that allowed it to become stronger for its subsequent expansion in Latin America ”, indicates the company.
The airline also reported that in parallel to the decision to file for the Bankruptcy Code, it will seek to initiate a reduction of its operations in Peru in accordance with local laws. “This decision supports size adjustment efforts and will allow Avianca to focus on its main markets upon exiting its court-supervised reorganization, ”the statement added.
All against the coronavirus
By following these recommendations we prevent the spread of coronavirus (Covid-19) in our country: 1. Wash your hands frequently, 2. Do not greet people with kisses or handshakes, 3. If you cough, cover your mouth with your elbow flexed or with a disposable tissue, 4. Avoid touching your eyes , nose and mouth, 5. If you have a fever or shortness of breath, seek medical attention, but call line 123, 6 first. Follow the instructions of local and national authorities.
Likewise, the Ministry of Health developed an application for the cell phone that allows to follow what happens with the Covid-19 in the country. CoronaApp is available for free to download on Android and iOS devices.
And remember, stay home!
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