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Bloomberg
Avianca Holdings SA, one of the biggest carriers in Latin America, filed for Chapter 11 bankruptcy after travel bans across the region forced the Colombian airline to ground its fleet.
Avianca, which counts United Airlines Holdings Inc and Kingsland Holdings as stakeholders, filed for protection from its creditors in the Southern District of New York, according to court papers. It listed as much as $10 billion in liabilities and the same amount in assets. The company said it would not make bond payments due on Monday.
The carrier grounded planes in late March after governments across Latin America sealed borders to curb the spread of the Covid-19 pandemic. Avianca had just emerged from a tumultuous year in which it restructured debt and embarked on a business turnaround plan aimed at restoring profitability by focusing on flights through its Bogota hub.
It cited the impact of the pandemic in a statement Sunday, adding that it intends to keep flying during the reorganisation.
“Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the Covid-19 pandemic,†Chief Executive Officer Anko Van Der Werff said in the statement. “We believe that a reorganisation under Chapter 11 is the best path forward to protect the essential air travel and air transport services that we provide across Colombia and other markets throughout Latin America.â€
In late March, the company deferred lessor payments, canceled planned investments and offered unpaid leave to the majority of its 21,000 employees to cut costs. The company also delayed filing its annual report until June and said it will include a warning that there’s substantial doubt about Avianca’s ability to stay in business.