Pandemic Fallout: World's Second Oldest Airline Goes Bust
World's second oldest airline, Avianca Holdings, on Sunday filed for bankruptcy as it struggles against the coronavirus pandemic and the resulting government-mandated air travel restrictions.
“The filing was necessitated by the unforeseeable impact of the COVID-19 pandemic, which has resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by $314 billion, according to the International Air Transport Association”, Latin America's second-largest airline said in a statement.
If it fails to come out of bankruptcy, Colombia-based Avianca would be one of the first large carriers globally to go bust as a pandemic fallout. The carrier said it has not operated any of its regularly scheduled passenger services since mid-March, which reduced its consolidated revenue by over 80% and placed significant pressure on its cash reserves. The company had failed to meet a bond-payment deadline while its pleas for government aid have been unsuccessful. Avianca Chief Executive Anko van der Werff said: "Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic." He continued: "Despite the positive results yielded by our 'Avianca 2021' plan, we believe that, in the face of a complete grounding of our passenger fleet and a recovery that will be gradual, entering into this process is a necessary step to address our financial challenges."
If it fails to come out of bankruptcy, Colombia-based Avianca would be one of the first large carriers globally to go bust as a pandemic fallout. The carrier said it has not operated any of its regularly scheduled passenger services since mid-March, which reduced its consolidated revenue by over 80% and placed significant pressure on its cash reserves. The company had failed to meet a bond-payment deadline while its pleas for government aid have been unsuccessful. Avianca Chief Executive Anko van der Werff said: "Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the COVID-19 pandemic." He continued: "Despite the positive results yielded by our 'Avianca 2021' plan, we believe that, in the face of a complete grounding of our passenger fleet and a recovery that will be gradual, entering into this process is a necessary step to address our financial challenges."
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