For the coronavirus, the second oldest airline in the world asked for bankruptcy

The Colombian airline Avianca announced this Sunday that it requested the preventive bankruptcy of creditors under the bankruptcy law of the United States, in order to “reorganize” their businesses, affected by the “unpredictable impact of the pandemic” of coronavirus.

The company reported in a statement that its parent Avianca Holding “and some of its subsidiaries and affiliates” made the request before a court in the Southern District of New York “in order to preserve and reorganize” their businesses.

The document specified that the group’s firms asked “to voluntarily use chapter 11” of the US bankruptcy law, which is what makes it possible to reorganize a company in difficulty under an agreement with its creditors.

Avianca, the largest private airline in Colombia and the second oldest in the world – turned 100 years old last December -, has routes to 26 countries but its main market is in domestic flights, suspended since March 23 last.

The company said that the stoppage of its passenger operations caused a drop in revenues of more than 80%, which resulted in “significant pressure on its liquidity,” according to the EFE news agency.

At the end of last April, Avianca published a notice in which it announced flights within Colombia starting tomorrow and offered tickets with tax discounts, days after the government extended the quarantine until today and warned that all national and international flights of passengers remained suspended without a deadline.

That publication cost the company a public challenge from President Iván Duque.

The group that owns Avianca – which also includes the Salvadoran Taca and the Ecuadorian Aerogal, among others – reported that it generates more than 21,000 direct and indirect jobs in Latin America (14,000 of them in Colombia) and works with a network of more than 3,000 providers.

The company went through a similar process of liability restructuring and business reorganization under US bankruptcy between 2003 and 2004, after which new shareholders entered its control package, and since 2013 it is listed on the New York Stock Exchange.

Colombia had 11,063 confirmed cases of coronavirus (568 in the last 24 hours), of which 463 resulted in deaths (18 on the last day) and 2,705, in the cure of patients after their infection, reported Sunday night on Ministry of Health.

The capital Bogotá concentrates the largest number of cases in the country, with 4,155 (37.6% of the total).

The government decreed quarantine at the end of last March and this week extended it until the 25th of this month, after starting a gradual and partial return to work in some regions of the country on Monday.

Written by Argentina News

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