{"id":2631,"date":"2020-05-15T16:15:58","date_gmt":"2020-05-15T16:15:58","guid":{"rendered":"https:\/\/myinfobag.com\/?p=2631"},"modified":"2020-05-31T20:04:32","modified_gmt":"2020-05-31T20:04:32","slug":"why-colombian-airlines-avianca-drove-to-bankruptcy","status":"publish","type":"post","link":"https:\/\/myinfobag.com\/?p=2631","title":{"rendered":"Why Colombian Airlines Avianca was Driven into Bankruptcy"},"content":{"rendered":"\n

Why Avianca was Driven into Bankruptcy<\/strong><\/h3>\n\n\n\n

Latin America\u2019s second-largest Airline, \u2018Avianca,\u2019 has filed for bankruptcy. Due to the COVID\u201319 pandemic spread around the world, the Airline has filed a plea for Coronavirus aid from the Colombia government, which was unsuccessful. The Airline was unsuccessful in meeting a bond payment deadline, and after an unsuccessful plea request, the Airline was declared bankrupt.\u00a0<\/p>\n\n\n\n

However, if the Airline fails to come out of bankruptcy, the Bogota based Avianca will be the first carrier to suffer as a result of the pandemic. Since March 2020, Avianca has not flown a regularly scheduled passenger flight. Even the employees of the company are suffering a lot. It has been known that around 20,000 employees of Avianca have gone without pay through the pandemic period. <\/p>\n\n\n\n

The chief executive of the company, Anko van der Werff, said: \u201cthe company is facing the high amount of crises in comparing to the last 100 years\u201d. Another statement from the chief economist has also given a depressing statement in a news release. He said, “despite restructuring its debt in last year, the company has been debited with large no. of debts during this year.\u201d<\/p>\n\n\n\n

Aviana had declared a debt total of $7.3 billion in 2019. The Airline filed Chapter 11 bankruptcy in New York and announced that it would remain operational.\u00a0In 2000, Avianca airlines was on the verge of bankruptcy when it was undertaken by Bolivian born \u2013 oil Businessman, \u2018German Efromovich.\u2019 The United States is going to lose up to $700 million in loans related to Avianca.<\/p>\n\n\n\n

Reason for Bankruptcy<\/strong><\/h3>\n\n\n\n

The management of the company told that it was focused on a cost-cutting reorganization dubbed \u2018Avianca 2021\u2019 before the crises. Even the accounting firm of Avianca, i.e., KPMG, said, \u2018it doubts that the company could survive a year more.\u2019 The share price of Avianca closed at 88 Cents in New York, from a high of more than $18 hit in 2014.<\/p>\n\n\n\n

On Sunday, the company was facing a $65 million bond payment due. The analyst thought that the company is not in the position to pay off the debt. S&P downgraded the Airline to CCC status. Airline executives have also confirmed that they had not paid the due amount. They also highlighted that due to the pandemic outbreak, the company is under its worst period. <\/p>\n\n\n\n

To secure emergency aid for the Colombia government, Van Der Werff had also mounted a public relations campaign. But till Sunday, none of them has been materialized. Due to the fight against Coronavirus, Avianca\u2019s main hub – Colombia, El Salvador, and Peru have already shut down their traffic. It is the reason the Avianca airline had no fixed date to resume operations. <\/p>\n\n\n\n

The company got into a tough situation after it had to cancel all its plane bookings for May. As the lockdown was increased in Colombia, the only option left with the Airline was to refund the money.\u00a0Airline Avianca Brasil and Avianca Argentina also marked their exit in 2019. Avianca Colombia is the 3rd<\/sup> Efromovich\u2019s Airline to shut their operations.\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Why Avianca was Driven into Bankruptcy Latin America\u2019s second-largest Airline, \u2018Avianca,\u2019 has filed for bankruptcy. Due to the COVID\u201319 pandemic spread around the world, the Airline has filed a plea for Coronavirus aid from the Colombia government, which was unsuccessful. The Airline was unsuccessful in meeting a bond payment deadline, and after an unsuccessful plea […]<\/p>\n","protected":false},"author":2,"featured_media":2670,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2795,21],"tags":[5466,5465,5086,1461,1733,4869],"yoast_head":"\nWhy Colombian Airlines Avianca was Driven into Bankruptcy | MyInfoBag<\/title>\n<meta name=\"description\" content=\"Latin America\u2019s second-largest Airline, \u2018Avianca,\u2019 has filed itself for bankruptcy. 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