Avianca emerges from Chapter 11 and expects to double its network in the next three years

Edgardo Gimenez Mazó

Updated on:

Avianca Holdings has announced the completion of its financial restructuring process, marking its exit from Chapter 11 after raising USD 1.7 billion in investments, reducing its debt and leaving it with more than USD 1 billion in liquidity.

Avianca had voluntarily submitted to this process by mid last year after being severely hit by the pandemic, in the same way as other two of the continent’s large airline groups, LATAM and Aeroméxico, did.

In this period Avianca renewed its business model in what they explained as a combination that includes «the best attributes of the low-cost model» but maintaining the key differentials of its traditional offer, thereby allowing it to offer significantly more competitive prices.

New shareholders will invest in the new Avianca Group International Limited, headquartered in the United Kingdom (Avianca Holdings was headquartered in Panama), as part of the approved renegotiation plan.

«This is an important day for Avianca and all our stakeholders. We are very pleased to emerge successfully from this process, with a stronger financially positioned company that will continue to serve all of its customers and fly for many years to come. We look forward to continuing to deliver on our new business vision and capitalize on the recovery in travel demand to drive our future success,» said Rohit Philip, Avianca’s Chief Financial Officer.

Over the next three years, Avianca expects to nearly double its network, reaching almost 200 routes in Latin America and the world and with a fleet of more than 130 aircraft by 2025, which will have reconfigured and lighter next-generation seats designed to reduce the carbon footprint of its operations. This includes an investment of more than USD 200 million in refurbishing the seats of its A320 fleet.

The holding company also emphasized that it will continue to develop the cargo business through Avianca Cargo, considered a «strategic business» that will expand into other markets.

Adrian Neuhauser, President, and CEO of Avianca said they look forward to «a successful future for the Company as we continue to build the Avianca story. We are thankful for the support of our customers, partners, and financiers throughout this process. I would also like to thank our people for their commitment to providing uninterrupted service to all customers and whose hard work has allowed us to complete this process efficiently. I am confident that we are well-positioned to be a highly competitive and successful airline».

Roberto Kriete, Chairman of the Board, said he was «very proud of the work that the Avianca team has done, which has led the company to exit the C11 on time, as a financially stronger organization. Even though we are on the right path to recovery, we must remain cautious about the progress of the pandemic, which is not yet over. I have full confidence that, with the support of our investors, all those who believed in us, and with the current management, this company will grow and continue to connect Latin America».

 

Deja un comentario