Lawstreet Journal

Columbian Airline Avianca Files For Bankruptcy Protecting in US Court

Lawstreet Journal 11 May 2020 10:56pm

Image courtesy: Lawstreet Journal Business Columbian Airline Avianca Files For Bankruptcy Protecting in US Court

Avianca, Columbia’s national airline, has filed for bankruptcy protection on 10th March 2020 in a US court.

The carrier is the second-largest airline in Latin America after TAM Airlines, but its operations involving passengers have been on hold due to the worldwide spread of the Coronavirus since March 2020.

The novel coronavirus has caused demand for air travel to plummet around the world due to travel restrictions.

The airlines stated that the pandemic was the reason it has lost more than 80% of its income, and it was scrambling to survive with a high amount of fixed costs. It is responsible for more than 21,000 jobs throughout the region, inclusive of 14,000 jobs within Columbia

If it is unsuccessful and fails to get out of a bankruptcy situation, Avianca will be the first significant air passenger carrier to become insolvent amid COVID-19.

It had filed for Chapter 11 bankruptcy protection in a court in New York, said the firm in a statement on 10th March 2020. The main motive of the process is to put off the US company's debts to its creditors, giving it time to reorganize its obligations or start selling some parts of its business.

Chief executive of Avianca, Anko van der Werff stated that the move was necessary to make sure that the New York-listed airline emerged as a "better, more efficient airline that operates for many more years".

The question that arises is, how does the airplanes plan on flying again?

More than 140 of the airline’s airplanes have been stopped from flying and are… Continue Reading...

Tagged: Insolvency and Bankruptcy Code  
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