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Avianca, the second-largest South American airline and member of the Star Alliance, filed for bankruptcy in the United States on May 10. The Colombian government’s request for government aid has so far been unsuccessful and a $ 65 million bond was due on Sunday. Avianca plans to restructure under Chapter 11 of the United States bankruptcy law.
More recently, Avianca also flew from Bogotá to Munich. Avianca had its home in Colombia and is a holding company with branches in various countries in South America. Both the holding company and several branches are affected by the bankruptcy. Avianca Brasil and Avianca Argentina had already filed for bankruptcy about a year ago.
Avianca’s LifeMiles frequent flyer program is not directly affected by bankruptcy. It is an independent company and it should be possible to redeem miles for Star Alliance flights. Already with the bankruptcy of Air Berlin, it has been shown that a frequent flyer program is highly dependent on the partner airline.
Avianca says it continues to issue refunds for canceled flights despite the bankruptcy. If this promise is not followed, a credit card payment chargeback has been found to be the best way to get your money back in the bankruptcy of Air Berlin and Germania.
Chapter 11
In the past, several major US airlines have gone through Chapter 11 bankruptcy in the United States. Especially after September 11. Airlines can continue to operate, but at the same time they are protected from the claims of creditors. Chapter 11 bankruptcy proceedings can be filed by a US company, but they can also be filed by a US company or by assets in the United States. The Chapter 11 bankruptcy serves as a template for the German protective shield procedure, which Condor is currently going through.
Source: Reuters
