Avianca announced on Wednesday that it had successfully restructured the financial process to emerge from Chapter 11, US bankruptcy legislation.
According to the Colombia-based airline, the agreement reached with its creditors allowed it to reduce its debt and obtain more than $1 billion in liquidity.
The company is the first of the three large Latin American carriers to leave the bankruptcy – in addition to the Colombian company, the Chilean company LATAM and Aeromexico also appealed to the US courts to renegotiate their debts.
Avianca had joined Chapter 11 in May, just weeks after the Covid-19 pandemic began. The financial situation was already precarious before the health crisis, with the departure of the company’s executive committee.
According to Avianca, New York’s Southern Court approved the proposed reorganization plan, clearing the way for leaving Chapter 11 by the end of the year.
The carrier was optimistic about the future, in which it expects to expand the air network to 200 routes over the next three years. There will be 130 aircraft by the end of 2025, configured with new-generation, lighter seats in order to reduce the carbon footprint.
Avianca recently retired its Airbus A330s in order to maintain a unique long-range fleet with the Boeing 787-8 Dreamliner. The company also said that it intends to expand its cargo division in the coming years.
“We are very proud of the work that the Avianca team has done that has led the company to emerge from Chapter 11 on schedule as a financially stronger organization. While we are on the right path to recovery, we must remain cautious with the progress of the pandemic that has yet to end and must stay focused on executing our new business plan,” said Roberto Kriete, Chairman of the Board.
