Avianca exits bankruptcy protection after 18 months
James ChappleColombian carrier Avianca has finally exited Chapter 11 bankruptcy protection after an 18-month restructuring process, and hopes to restart UK flights early next year.
Avianca entered Chapter 11 last May, and has spent a year-and-a-half coming to agreements with its creditors while sourcing some $1.7 billion (£1.3 billion) in fresh funding.
These actions, said Avianca, will allow the carrier to emerge with a "solid balance sheet, significantly reduced debt and more than $1 billion (£750 million) in liquidity."
The restructuring process, meanwhile, has allowed Avianca to revamp its business model with a focus on efficiency and maintaining a lower cost base.
“This is an important day for Avianca and all of our stakeholders," said chief financial officer Rohit Philip. "We look forward to continuing to execute our new business vision and capitalising on the recovery in travel demand to drive our future success.”
The airline’s recovery plan includes more competitive pricing, personalised fares and flexibility; it is also aiming to "nearly double" its network over the next three years to almost 200 routes, with a focus on point-to-point flying.
Avianca’s fleet will increase to more than 130 aircraft by the end of 2025, largely split between Airbus A320s to serve short-haul routes and Boeing 787s long-haul. The carrier is also investing more than $200 million (£150 million) in renewing its seats.
An Avianca spokesperson told TTG the carrier planned to restart its Bogota-London route in the first-quarter of 2022, depending on the "evolution" of the situation with regards to the new Omicron variant of Covid-19.
Roberto Kriete, chair of the Avianca board, added: "While we are on the right path to recovery, we must remain cautious with the progress of the pandemic that has not yet ended and must stay focused on executing our new business plan."
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