Avianca Expects to Emerge From Reorganization Before the end of 2021
Avianca expects to emerge from the court-supervised reorganization process by the end of the year as a stable, financially viable airline, further supported by continued growth of their cargo and loyalty businesses.
On Tuesday (November 2, 2021), Avianca announced that they expect to emerge from their court-supervised restructuring process before the end of 2021, after submitting additional documentation to the U.S. Court for the Southern District of New York. With an updated business plan, the airline will emerge as a stable, financially viable company, further supported by growth in their loyalty and cargo businesses. Avianca’s new vision combines the airline’s 100-year legacy, with optimized service to meet the needs of today’s guests across Latin America and beyond. The carrier will exit the reorganization process with a solid balance sheet, substantially reduced debt and over $1.0 billion in liquidity. Avianca’s simplified business model will offer more competitive pricing, reconfigured aircraft with best-in-class seating, an expanded domestic and international network, and a refinanced aircraft portfolio.
In Tuesday’s announcement, Avianca’s Chief Financial Officer, Rohit Philip, said,
“We are pleased to have reached this critical milestone and look forward to emerging as a stronger organization that is well positioned to fly the skies for many years to come. The financial and operational progress we have already achieved are a testament to the tenacity and commitment of the entire Avianca team, and I am proud of their tremendous efforts.”
Avianca’s President and Chief Executive Officer, Arian Neuhauser, added,
“On behalf of everyone at Avianca, I want to express our gratitude to our loyal customers, partners, and lenders for their continued support. I especially want to thank Judge Glenn for his thoughtful and responsible oversight of the process. Looking ahead, with a stronger financial foundation, Avianca will be better positioned to capture recovering travel demand with a compelling value proposition to meet the needs of today’s clients across Latin America and beyond. We are a company that combines an over-100-year legacy with modern, optimized service, while remaining committed to continuing to set the standard for safety, customer service, and value across the industry.”
As Avianca exits reorganization, the airline will keep their differentiating and competitive assets such as a robust network and loyalty program, VIP lounges, signature services, and one of the most competitive cargo businesses in the region. The carrier will operate a higher network density with a fleet of over 130 aircraft flying more than 200 mostly point-to-point routes by the end of 2025. Avianca will also operate under a leaner cost structure and continue to leverage their successful cargo business and LifeMiles loyalty program.
Avianca currently offers one of the most robust networks in Latin America with 100 routes and over 2,680 weekly flights, offering nearly 400,000 available seats weekly.