Some US$7.3 billion in debt in 2019, Avianca Holdings was unable to meet a bond payment on time and is now hoping for a bailout from the Colombian government.
Latin America’s second largest airline, Avianca is now in serious danger of becoming one of the first major airlines to go under on account of the COVID-19 pandemic.
According to Reuters, the Bogota-based carrier has not operated a regular passenger flight since late March, while most of its 20,000 staff have gone unpaid through the global health crisis.
“Avianca is facing the most challenging crisis in our 100-year history,” Avianca CEO Anko van der Werff said in a statement.
Juan David Ballen, chief economist at Bogota’s Casa de Bolsa brokerage, said the announcement “isn’t a surprise at all”.
“The company was heavily indebted despite the fact it tried to restructure its debt last year,” he remarked.
While it restructures, the airline said it would continue to operate.
Meanwhile, the Colombian Association of Civil Aviators (ACDAC), a union that represents many Avianca workers, says it supports the move.
In the early 2000s, Bolivian-born oil businessman, German Efromovich, saved Avianca from going under.
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