Amid COVID-19, some businesses had been hurt by the lockdowns and travel bans--from small big corporations. Now, one of the oldest Latin America Airlines, Avianca (AVH), had filed for bankruptcy.
Avianca is now the latest major airline that had been collapsed due to the coronavirus crisis. The Columbian Airline filed for Chapter 11 bankruptcy in the U.S. Southern District of New York on Sunday, May 10. In a statement, it mentions that the collapse on the "unforeseeable impact of the COVID-19 pandemic" is the reason. After announcing the sad news, it caused carriers to change flight schedules and put staff on unpaid leave. Currently, the carrier employs 21,000 people throughout Latin America, including more than 14,000 in Colombia.
Why They Filed?
According to Columbian carrier, they came up with the decision to "protect and preserve operations" as the outbreak continues.
"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."
AVH was founded in 1919 and known to be the world's second-oldest continuously running airline. Before 2019 ended, it became the third-largest airline in Latin America based on market share, after Chile's LATAM Airlines (LTM) and Brazil's GOL Linhas Aéreas (GOL), according to Euromonitor, according to CNN.
In March, Virgin Australia collapsed after failing to obtain a government bailout.