What’s next for Avianca after exiting bankruptcy protection?

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A revamped Avianca (AVHOQ) has emerged from bankruptcy protection, 18 months after filing for a Chapter 11 process in the United States. AeroTime takes a look at its plans.  

The Colombian carrier announced on December 1, 2021 that it had successfully completed its financial restructuring process with reduced debt and over $1 billion in liquidity.  

Avianca (AVHOQ) entered bankruptcy protection in May 2020, not long after the start of the COVID-19 pandemic that has devastated global air traffic. It was joined in bankruptcy proceedings by two other Latin American carriers - Aeromexico and LATAM. 

Now Avianca (AVHOQ) has restructured its debt and will move forward with its new business plan, which it hopes will make it a more efficient airline. Avianca (AVHOQ) said it has taken “the best attributes” of low-cost carriers, while retaining some key differentiators.   

The new business plan includes the following aspects: 

  • A passenger fleet of more than 130 aircraft, which will operate nearly 200 routes by the end of 2025. These routes will be mainly point-to-point 

  • Reconfigured cabins across the fleet with lighter seats and higher seating capacity   

  • Boeing 787 Dreamliner aircraft for long-haul flights 

  • More affordable pricing, with ticket options to allow customers to pay for only the services and flexibility they need 

  • Continued growth of the air cargo business, building on its position in Colombia and expanding into other strategic markets  

  • Continuing the LifeMiles loyalty businesses and remaining a member of the Star Alliance 

Avianca (AVHOQ) has been reconfiguring the cabins of its aircraft, so they can seat up to 20% more passengers. It said on December 1, 2021 that it intends to spend more than $200 million over the next year in seats, including new Premium, Plus and Economy types across its A320 fleet.  

It has already announced 23 new point-to-point routes for 2022 in what it terms strategic markets, including Colombia, El Salvador, Guatemala and Costa Rica.  

“This is an important day for Avianca (AVHOQ) and all of our stakeholders. We are pleased to be emerging successfully from this process, with Avianca (AVHOQ) in a stronger financial position to continue serving our customers and flying the skies for many years to come,” chief financial officer Rohit Philip commented. “We look forward to continuing to execute on our new business vision and capitalizing on the recovery in travel demand to drive our future success.” 

However, chairman Roberto Kriete added that Avianca (AVHOQ) needed to stay on its guard with respect to the ongoing COVID-19 pandemic.  

“While we are on the right path to recovery, we must remain cautious with the progress of the pandemic that has not yet ended and must stay focused on executing our new business plan,” Kriete said. 

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