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Avianca comes out of Chapter 11 bankruptcy: Business Traveler USA

Airline says it will almost double its route network over the next three years

Colombian airline Avianca has announced that it has exited Chapter 11 after completing its financial restructuring process. Avianca Holdings SA filed for bankruptcy in May 2020, citing “the unpredictable impact of the COVID-19 pandemic”.

The carrier said it had revamped its business model, coming out of the 18-month Chapter 11 process to become a more efficient and financially sound airline, with significantly reduced debt and more than $ 1 billion in cash.

Over the next three years, the airline plans to nearly double its network, expanding to nearly 200 routes in Latin America and around the world. Among the new services, the airline has already announced more than 20 new international routes, including six to and from Costa Rica.

Avianca announces that it will launch flights from the San José area (SJO) to Los Angeles and New York, to Cali and Medellín in Colombia, to Mexico City and to Managua, Nicaragua.

The airline’s financial plans include an investment of more than $ 200 million in reconfigured and lighter next-generation seats in its A320 fleet. The configuration will offer three new types of seats – Premium, Plus and Economy.

The Star Alliance carrier has said it will continue to fly the Boeing 787 Dreamliner on its long-haul services, including a new daily service between London Heathrow and Bogota from March 27. The aircraft is configured with economy and executive (business class) cabins, providing approximately 3,500 seats per week on the route.

The recapitalization will also allow Avianca to invest in its online customer service and digital channels. Over the next 12 months, the airline has announced plans to further improve these channels and applications to make it easier for passengers to manage their trips.

“This is an important day for Avianca and all of our stakeholders,” said Rohit Philip, Chief Financial Officer of Avianca. “We are delighted to successfully exit this process, with Avianca in a stronger financial position to continue to serve our customers and to fly in the skies for many years to come. We look forward to continuing to implement our new business vision and capitalizing on the recovery in travel demand to ensure our future success. “

According to the reorganization plan, the new shareholders will invest in a new holding company called Avianca Group International Limited, which will be domiciled in the United Kingdom and will consolidate the group’s investments in all of its subsidiaries (including Aerovias del Continente Americano, its Colombian subsidiary, and TACA International, its operation in Central America).

The former holding company, Avianca Holdings, was domiciled in Panama.