Avianca, the second oldest airline, driven to bankruptcy amid COVID-19

Avianca airline driven to bankruptcy amid COVID-19

On Sunday, the second biggest airline of Latin America, filed for bankruptcy when they failed to reach payment due date, while its appeal for COVID-19 relief from the government of Columbia, but got disappointed.

In case if it didn’t get out of the bankruptcy, Avianca, in Bogota, will be one of the earlier primary carriers all around the world to down due to the pandemic Coronavirus, that would unstable the global travel.

Since late March, the second biggest airline Avianca didn’t fly a routine schedule traveler flight, and the maximum number of its 20,000 workers have departed without getting pays.

Avianca, the second oldest airline, driven to bankruptcy amid COVID-19

Most dangerous time in hundred years history

Anko Van Der Werff, the Chief Executive of Avianca, told in a piece of news that Avianca is having the most dangerous time while seeing our hundred years history.

Although the airline was already very weak before the arrival of the novel coronavirus because Avianca’s bankruptcy filing shows the fears for the airline that couldn’t count on the state rescues. Moreover, the airline is consistently looking for help from the government.

The chief economist of Casa de Bolsa in Bogota, Juan David Ballen, said that this is not surprising at all. He continued the firm is largely indebted, although it struggles to restructure its debt previous year.

After KLM, Avianca Airlines is the 2nd oldest working airline in the entire world that 7.3 billion dollars in debt for the year 2019. Furthermore, Avianca submitted a file for Chapter eleven bankruptcy in New York and described that the company would not halt its operations, and it reschedule its debts.

ACDAC backed the action of Avianca

ACDAC (Colombian Association of Civil Aviator), which is a union that represents several Avianca workers, told that it backed the action.

In the early 2000s, the airline Avianca already passed through bankruptcy, and at that time, it was saved by German Efromovich, which is a Bolivian born oil businessman.

Efromovich raised the airline aggressively and also burdened the carrier with an admirable debt until Efromovich was expelled last year from the Avianca and board-room coup headed by United Airlines Holdings Incorporation. Furthermore, Efromovich still holds a majority stake in the airline.

Besides this, United stands to drop seven hundred million dollars in loans that are related to the Avianca airline.

On Sunday, Efomovich said Reuters that he rejected the decision to file for bankruptcy, and even he didn’t involve in making it.