Colombia’s national airline, Avianca, has filed for bankruptcy protection in a court in the US.
Avianca is Latin America’s second-largest airline, but its passenger operations are grounded since March due to coronavirus.
It said the pandemic had cut quite 80% of its earning, and it absolutely was combating high fixed costs.
If it fails to return out of bankruptcy, Avianca will be the major airline to go under amid the pandemic.
In a statement, the firm said it had filed for Chapter 11 bankruptcy protection in a court in New York. The process postpones a US company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.
Chief executive Anko van der Werff said the move was needed to ensure the New York-listed airline emerge as a “better, more efficient airline that operates for many more years”.
More than 140 of its aircraft are grounded since the President Ivan Duque shut down the airspace of the country in March. Most of its 20,000 employees are placed on unpaid leave.
Behind KLM, Aviancais that the second-longest continually running airline within the world.
Back in early 2000s, the carrier filed for bankruptcy, and was rescued by an agreement with an oil tycoon of Bolovia German Efromovich. The airline progressed rapidly under the direction of him, but its growing dues led to a successful boardroom coup against Mr Efromovich in 2019. it’s now being operated by Kingsland Holdings.
The pandemic has dealt an enormous blow to the aviation industry worldwide, as governments impose restrictions on travelling and confinement measures.
Air traveling worldwide has fallen by 90%, as reported by the International Air Transport Association. The body assumes that airlines of Latin America will suffer the lose of $15bn (£12bn; €13.9bn) in revenues in 2020 – the largest drop by the history of aviation industry.