According to a statement issued by Avianca (AVHOQ) on November 2, 2021, the Bankruptcy Court for the Southern District of New York has confirmed the reorganization plan, which was proposed by the Colombian earlier in October 2021. 

The Court精东影业 decision gives the green light for the indebted airline to finalize its Chapter 11 bankruptcy process by the end of 2021.

鈥淒uring the Confirmation Hearing, the Court requested that the Avianca (AVHOQ) debtors, as well as certain other parties, produce additional documentation. […] After reviewing the additional documentation, the Court announced today the confirmation of the Plan. The effective date of the Plan is expected to take place during Q4 2021,鈥� the company said in a .

Avianca精东影业 (AVHOQ) recently-approved reorganization plan should help the troubled airline get back on track. Following the plan, the carrier aims to cut its debts, stabilize its financial situation and more than $1 billion in liquidity by the time the bankruptcy process finishes. 

Avianca Airbus A320 makes hard landing in Colombia, reaches almost 5G force

• Airlines

byGabriele Petrauskaite

2021-10-29

The airline plans to reduce its costs by cutting its fleet by 15% and intends to operate 130 aircraft across 200 routes by 2025.

Avianca精东影业 (AVHOQ) parent company Avianca Holdings filed for Chapter 11 bankruptcy in the United States District Court for the Southern District of New York in May 2020. 

The company has already had significant unfulfilled financial liabilities in 2019, reaching around $7.3 billion at the time. Its debts have been exacerbated by the global pandemic.  

Avianca simplifies fleet, chooses Boeing 787-8 Dreamliner for long-haul service

• Airlines

byGabriele Petrauskaite

2021-10-22

During the bankruptcy process, Avianca (AVHOQ) was already funded by $2 billion debtor-in-possession financing, which was approved by the US Bankruptcy Court for the Southern District of New York on October 6, 2021.

The Bogota-based airline believes that operating long-haul flights between South America and Europe with a single type fleet will help the company to improve efficiency and profitability as well as reduce its environmental footprint amid the industry recovery period. 

According to Avianca精东影业 (AVHOQ) dated October 21, 2021, the Boeing 787-8 Dreamliner is the best option for the airline to follow its plan regarding capacity enlargement and sustainability.

In the statement, Philip states: 鈥淥ne of Avianca精东影业 (AVHOQ) strategic objectives is simplifying its fleet while increasing efficiency; selecting the 787-8 as the airline精东影业 single aircraft type for long-haul flights is an important step towards this goal.鈥�

He continues: 鈥淲e are proud to be able to confirm that we will continue to fly the Dreamliner, an exceptional aircraft that given its capabilities, features, efficiency, and comfort is the best solution for our company and our customers. We expect to retain our lie-flat business class seats, targeting our loyal business customers, while redesigning the rest of the cabin with latest-generation seats over the next 18 months.鈥� 

Avianca (AVHOQ) claims that the fuel-efficient 787-8 Dreamliner will significantly reduce the carrier精东影业 environmental footprint and cut fuel costs for long-haul flights by around 20%. In the meantime, Avianca (AVHOQ) expects to increase its cargo payload and passenger seating capacity to meet the demand for international operations post-pandemic.

As the jet is considered to be one of the most technologically advanced aircraft available on the current market, the airline also believes that enhanced cabin pressure levels and other innovative systems will improve the passenger experience for international flights. 

鈥淲e would like to thank Avianca (AVHOQ) for their ongoing commitment to the 787 Dreamliner. The aircraft, and its leading economic and environmental performance, will serve Avianca (AVHOQ) well as they grow during the market recovery ahead,” vice president of Boeing sales Ricardo Cavero said, as he reacted to Avianca精东影业 (AVHOQ) strategic decision.

Even though the carrier has selected the type for an international operations-dedicated fleet, it is yet to specify how its decision will affect its current fleet. To date, Avianca (AVHOQ) operates a of 145 aircraft, 14 of which are Boeing Family passenger jets, including 13 787-8 Dreamliners and a single 787-9 widebody aircraft. 

The Colombian airline Avianca (AVHOQ) announced that the U.S Bankruptcy Court approved its financing plan for over $2 billion, which should help the airline avert its extinction. It seems that the ongoing airline精东影业 battle for crucial financial injection slowly comes to the end.

Avianca (AVHOQ) received approval from the U.S. Bankruptcy Court for Southern District of New York which enabled the airline to get its financing package of $2 billion, the air carrier announced on October 5, 2020.

Adrian Neuhauser, the Chief Financial Officer of Avianca (AVHOQ) , said that the court精东影业 approval of the debtor-in-possession (DIP) financing package would help the struggling air carrier to make a further step in exiting the Chapter 11 restructuring process.

鈥淎s COVID restrictions begin to ease, we are pleased to have safely resumed passenger flights to 21 cities in Colombia and 14 international destinations and look forward to adding more destinations to meet our customers鈥� travel needs over the coming months,鈥� announced Anko van der Werff, the President and Chief Executive Officer of Avianca (AVHOQ) .

Family ties & state money: Avianca精东影业 loan raises disputes

• Airlines

byGabriele Petrauskaite

2020-10-22

The Colombian airline filed a motion for the financing package in the U.S. Bankruptcy Court on September 22, 2020. At the time, van der Werff said that the airline had already received support from the third-party institutional investors as well as already existing lenders.

The airline got involved in legal disputes after the Colombian court blocked Avianca精东影业 (AVHOQ) loan regarding scandalous information related to kinship ties between President of Colombia Ivan Duque Marquez and a Senior Executive at Avianca (AVHOQ) . The court had argued that the $370 million loan, a part of a $2 billion financing package, could give rise to a conflict of interest. 

Neglected after first flight: story of Avianca Boeing 787-9

• Airlines

byGabriele Petrauskaite

2020-10-22

Avianca (AVHOQ) did not put up its weapons and filed an appeal on the Colombian court精东影业 decision to suspend the payout of the loan. Following the most recent U.S. Bankruptcy Court精东影业 decision to approve the DIP financing package, Avianca (AVHOQ) should have ample liquidity to continue its reorganization process and support its operations in the future.

The brand new Boeing 787-9 Dreamliner has ended its operations as soon as it started them. The Dreamliner, now 1.3 year-old, was officially operational for an incredibly short time, during which it made its first and only flight. Boeing manufactured the wide-body on May 11, 2019. For the rest of the time since June 2019, the aircraft has been taking an unexpected rest while grounded in Abu Dhabi, United Arab Emirates.

The unusual short-term story of the aircraft鈥� began in 2017, when Colombia精东影业 flag carrier reached an agreement with Boeing to convert a previous order of three Boeing 787-8s to Boeing 787-9s, a bigger version of the Dreamliner. Two years later, on May 30, 2019, the airliner was handed over to Avianca精东影业 (AVHOQ) control while the jet itself and the associated engines were still located in Boeing facilities in Seattle, United States, reported SMBC Aviation Capital, the company that the aircraft was leased from.

The debut of the Avianca精东影业 (AVHOQ) spick-and-span 787-9 ended faster than one could imagine. On June 1, 2019, the aircraft was transferred by ferry flight to Abu Dhabi. Since then, the aircraft has been grounded there for an unlimited period of time, based on Planespotters.net data.

Perhaps, a similar fortune would have befallen the other two leased Boeing 787-9 aircraft that the airline had planned to receive by the end of 2021. Though, the Columbian air carrier had significant financial liabilities already in 2019, in a credit rating report prepared by Moody’s Investors Service. Avianca (AVHOQ) issued more debt to cover its short-term liabilities later in December 2019.

As the COVID-19 pandemic hit the aviation industry worldwide, Colombia implemented a strict lockdown. According to Reuters, Avianca (AVHOQ) was able to operate only non-scheduled flights between late March and May 2020 and the majority of the company精东影业 20,000 employees have gone without pay throughout the crisis. On May 10, 2020, Avianca (AVHOQ) filed for bankruptcy under Chapter 11 protections identifying the main cause of its collapse as an unpredictable impact of the pandemic.

The lack of liquidity and a total debt of $7.3 billion at the end of 2019 left the airline particularly vulnerable, therefore the COVID-19 pandemic could be the last nail to Avianca精东影业 (AVHOQ) coffin. While the company is fighting for survival, the Boeing 787-9 Dreamliner remains neglected in storage in Abu Dhabi pending changes in the aviation industry.

On May 18, Avianca (AVHOQ) announced that its Peruvian arm is ceasing operations and is preparing to be dissolved under the country精东影业 laws. The parent company is resorting to one of its smaller carriers’ liquidation 鈥渋n order to preserve and protect Avianca精东影业 (AVHOQ) businesses,鈥� as outlined in the company精东影业 statement.

Despite the Avianca Peru liquidation, routes to and from the country remain the group精东影业 plans. After the COVID-19 travel restrictions are lifted, the company hopes to employ its Colombian, El Salvadorian and Ecuadorian airlines to serve the routes to and from Peru. 

Avianca Holdings, the second-largest airline group in Latin America announced entering a voluntary bankruptcy procedure on May 10, 2020. 鈥淎vianca (AVHOQ) is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic,鈥� Anko van der Werff, Chief Executive Officer of Avianca (AVHOQ) , said at the time in the company’s statement. 

Back then, the company said it would close its Peru operations, as part of the effort to 鈥渞ight-size鈥� and shift focus on core markets. Together, the group airlines鈥� fleets stand at 148 aircraft (158 according to the company itself). The Peru-based carrier is one of the smallest members of the group, operating five aircraft.

Colombia’s Avianca (AVHOQ) has been flying uninterrupted for 100 years, making it the second oldest airline in the world, after KLM Royal Dutch Airlines. During the century, the airline group had less luck with its finances than it did with operations. Due to financial difficulties, the company already went through a similar bankruptcy process in 2003. 

鈥淎vianca (AVHOQ) is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic,鈥� Anko van der Werff, Chief Executive Officer of Avianca (AVHOQ) , was cited as saying in the company’s statement. 鈥淒espite the positive results yielded by our Avianca (AVHOQ) 2021 plan, we believe that, in the face of a complete grounding of our passenger fleet and a recovery that will be gradual, entering into this process is a necessary step to address our financial challenges.鈥�

Avianca精东影业 (AVHOQ) scheduled passenger operations have been grounded since mid-March 2020. Due to the COVID-19 outbreak, 88% of the countries where Avianca (AVHOQ) operates imposed total or partial passenger air transport restrictions. As a result, the company精东影业 revenues fell by over 80% 鈥減lacing significant pressure on its cash reserves鈥�.

In response to the crisis, the Columbian airline group has already imposed employee furloughs, temporary wage reductions, reductions in non-essential capital expenditures and temporary deferred payments on long-term leases. 

However, the company’s substantial financial obligations coupled with the obscure outlook of the COVID-19 crisis recovery, 鈥渕ade it necessary for Avianca (AVHOQ) to explore alternatives to reorganize its operations and restructure its debt鈥�.

While Avianca (AVHOQ) plans to continue its operations during the court-supervised reorganization process, this does not apply to its activities in the Peru market. Avianca (AVHOQ) said it would close its Peru operations, as part of the effort to 鈥渞ight-size鈥� and shift focus on core markets. 

Avianca (AVHOQ) is the largest airline in Colombia and El Salvador and the second largest in Latin America. The brand encompasses multiple passenger and cargo airlines under Avianca Holdings umbrella company. Since May 24, 2019, Avianca Holdings is controlled by Kingsland Holdings, an independent third party of United Airlines.

Avianca (AVHOQ) has been flying for 100 years. The company has a fleet of 158 aircraft, employs over 21,000 people, and flies to 76 destinations in 27 countries within the Americas and Europe. In 2019, Avianca Holdings reported $4.6 billion in revenues. 

Avianca (AVHOQ) 2021 plan was announced on February 22, 2019. The corporate transformation plan consists of four key areas of improvement:

1. the improvement of operational indicators; 
2. fleet adjustments; 
3. the optimization of operational profitability;
4. repositioning of non-strategic assets.

In 2003, Avianca (AVHOQ) already underwent a Chapter 11 process. 

The suspension is effective from June 9, 2019, and should last 90 days, according to Argentina’s civil aviation authority (ANAC). “With the current aircraft and the competition that exists, it is not viable to continue with the operations,” said the CEO of the company, to Argentinian news agency Telam. This state-approved suspension should protect Avianca Argentina from sanctions linked to flight suspensions. Operations were halted two days before the official date, on June 7, 2019.

Avianca Argentina was operating a fleet of two ATR 72-600 on two domestic routes: Buenos Aires-Mar Del Plata and Buenos Aires-Santa Fe. The airline also shrunk from 500 employees last year to just 142 today.

The decision comes two weeks after the operations of Avianca Brasil were also put to a halt. On May 24, 2019, based on information on the company精东影业 operations provided by the flight safety department of the Brazilian authority for civil aviation. About 30 flights per day were being operated at the time of the suspension.

Brazil鈥榮 fourth-largest airline had been under bankruptcy protection since December 2018, after three leasing companies have demanded the carrier for the return of a third of its fleet.

In May 2019, entrepreneur Germ谩n Efromovich, who controls Synergy Group, the majority shareholder in Avianca Holdings, was expelled from his position as Avianca精东影业 (AVHOQ) chairman by United Airlines for breaching the terms of a loan agreement. Control was handed to another minority shareholder of Avianca Holdings: Texas-based Kingsland Holding.