The economic impact of the novel coronavirus pandemic has busted another major international airline.
The Colombian airline Avianca filed for Chapter 11 bankruptcy in the United States Southern District of New York. According to a statement issued by the airline, it pinned the blame for its collapse to the "unforeseeable impact of the Covid-19 pandemic."
Avianca is the second-oldest continuously running airline of the world and was formed in 1919. And according to Euromonitor, the airline was the third-largest airline in Latin America on the basis of market share as of the end of last year, preceded only by Chile's LATAM Airlines and Brazil's GOL Linhas Aéreas.
This airline is also a member of the industry group the Star Alliance, which includes a number of other major airlines of the world such as Lufthansa and Singapore Airlines. A majority stake in Avianca was taken up last year by a holding company affiliated with United Airlines.
The loss of business because of the strict travel restrictions imposed by various governments around the world to prevent the spread of the coronavirus pandemic has hit global airline industry and Avianca is the latest major airline to get busted because of this. The travel restrictions have forced all airlines to massively cut down on their flight schedules, ground planes and cut jobs and slash salaries.
Virgin Australia was sent into administration last month after the company failed to secure a bailout package form the Australian government. Flybe, the UK budget carrier, was pushed administration in March as the company said that the financial challenges that it faced were far greater compared to the hit that it was expecting because of the pandemic.
The lockdowns around the world as the pandemic worsened, hit the airline very hard, the Colombian carrier said. According to the company, 88 per cent of all the countries where Avianca currently operates have been totally or partially shut down in the wake of the spread of the pandemic.
The company said that it had taken the decision to file for bankruptcy because it intended to "protect and preserve operations" with the expected continuation of the pandemic across the world. Throughout Latin America, Avianca directly employs 21,000 people which include more than 14,000 in Colombia - where the company is the national carrier of the country.
The airline also said that it plans to shut down its business in Peru so as to reduce costs and "renew its focus on core markets" in addition to pursuing bankruptcy protection.’
"Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the Covid-19 pandemic," CEO Anko van der Werff said in a statement. "We believe that a reorganization 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."
Avianca was "in a period of upheaval" since last summer and was already struggling according to research report of the Sydney-based Centre for Aviation.
(Source:www.cnn.com)
The Colombian airline Avianca filed for Chapter 11 bankruptcy in the United States Southern District of New York. According to a statement issued by the airline, it pinned the blame for its collapse to the "unforeseeable impact of the Covid-19 pandemic."
Avianca is the second-oldest continuously running airline of the world and was formed in 1919. And according to Euromonitor, the airline was the third-largest airline in Latin America on the basis of market share as of the end of last year, preceded only by Chile's LATAM Airlines and Brazil's GOL Linhas Aéreas.
This airline is also a member of the industry group the Star Alliance, which includes a number of other major airlines of the world such as Lufthansa and Singapore Airlines. A majority stake in Avianca was taken up last year by a holding company affiliated with United Airlines.
The loss of business because of the strict travel restrictions imposed by various governments around the world to prevent the spread of the coronavirus pandemic has hit global airline industry and Avianca is the latest major airline to get busted because of this. The travel restrictions have forced all airlines to massively cut down on their flight schedules, ground planes and cut jobs and slash salaries.
Virgin Australia was sent into administration last month after the company failed to secure a bailout package form the Australian government. Flybe, the UK budget carrier, was pushed administration in March as the company said that the financial challenges that it faced were far greater compared to the hit that it was expecting because of the pandemic.
The lockdowns around the world as the pandemic worsened, hit the airline very hard, the Colombian carrier said. According to the company, 88 per cent of all the countries where Avianca currently operates have been totally or partially shut down in the wake of the spread of the pandemic.
The company said that it had taken the decision to file for bankruptcy because it intended to "protect and preserve operations" with the expected continuation of the pandemic across the world. Throughout Latin America, Avianca directly employs 21,000 people which include more than 14,000 in Colombia - where the company is the national carrier of the country.
The airline also said that it plans to shut down its business in Peru so as to reduce costs and "renew its focus on core markets" in addition to pursuing bankruptcy protection.’
"Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the Covid-19 pandemic," CEO Anko van der Werff said in a statement. "We believe that a reorganization 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."
Avianca was "in a period of upheaval" since last summer and was already struggling according to research report of the Sydney-based Centre for Aviation.
(Source:www.cnn.com)
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